Tuesday, 03 April 2012 02:30
By caribarena news
Antigua St John's - The Antigua and Barbuda Trade Union Congress (ABTUC) has called on the government to delay the implementation of changes to the personal income tax.
The union stressed that economic conditions would make the implementation an undue burden on residents.
Its release is reprinted in full below:
In respect of the guide to PAYE on allowances and benefits, the Antigua and Barbuda Trade Union Congress (ABTUC) has and continues to take the position that the percentage of our workforce who presently carry the bulk of the Income Tax burden, ought not to experience any further hardship at this time.
We do recognize that Income Tax has already been legislated since 2005 and although the area of Allowances and Benefits had been deferred at that time the Government's social obligations must be adequately met with revenue derived from taxation.
However this must be balanced against equitable implementation and fiscal responsibility.
The ABTUC is also aware that our present economic climate is flat, unemployment is high, disposable incomes have been steadily eroded over the past four years, still there is a misconception that the present taxpayer is still in a reasonable position to increase his tax contribution. Our position therefore as stated earlier:
• No additional undue hardship should be experienced by workers who are already paying their fair share of tax.
The context of this last remark rests in the spirit of consultations held between the Ministry of Finance and the ABTUC where it was agreed that taxation must be fair and equitable to all citizens.
In the expression of that goodwill we were able to negotiate a number of adjustments to the taxable employee benefits and allowances, which resulted in a recirculation of a slightly modified version of the initial Draft PAYE Guide.
The following are a few of the Trade Union Congress's achievements:
1. TRAVEL ALLOWANCE. A Travel Allowance to get to and from work was not considered under the initial draft PAYE Guide however the TUC was able to negotiate an average tax free travel allowance of $750.00.
2. EDUCATION. Initial educational provisions did not include personal development. A non-taxable benefit was only received if training was given by an employer solely for the employer's benefit; that is, training was directly related to the job. The TUC successfully advanced that all training and educational benefits whether related to the job or not ultimately enhances the national economy and therefore should not represent a taxable benefit. As it now stands, education and skills training benefits or allowances are non taxable.
3. UNIFORMS. The Draft document only provided for distinctive uniforms or protective clothing to be considered as a non-taxable benefit. The TUC was able to include all uniform wear as non-taxable as long as receipts are provided to the employer.
4. EMPLOYER PROVIDED GOODS & SERVICES. The TUC successfully negotiated as a non-taxable benefit, all goods and services an employer may make available to an employee. For example, goods sold to the employee at cost, low interest loans to bank employees, legal services to an employee of a law office. These benefits were all formerly considered to be a taxable benefit to the employee under the Nov 26th 2011 Draft Guide.
5. UTILITIES. All utility allowances were considered to be a taxable benefit under the Original Draft Guide. However, the present provision as negotiated by the TUC is to facilitate employer paid utility allowances subject to the caps noted. For example, an electricity allowance of up to $250.00 per month is now non-taxable.
6. LONG SERVICE AWARDS. Vacation trips and gifts given to an employee in recognition of his or her years of service do not constitute a taxable benefit on the condition that it is offered once in a five year period. Formerly, this benefit was taxable. It is now not taxable and represents yet another TUC negotiated benefit for workers.
7. PENSION PLAN CONTRIBUTIONS. The initial PAYE Guide of November 2011 allowed an employer to contribute (tax free) up to 5% of an employee's wage or salary toward the employee's pension or thrift fund. The TUC was able to negotiate an increase in employer's contribution of up to 7-1/2%.
Additionally, the TUC was very forthright with the Minister of Finance about his Ministry's obligations to the Antiguan public in respect of the following matters:
• The Government’s failure to present Audited National Financial Accounts to the public.
• Responsibly managing the Government’s Tax/Revenue computations/collections machinery going forward.
• Revisiting all Government employee contracts with a view to including allowances and benefits as pensionable salary.
The TUC would like to take this opportunity to thank members of the public who assisted the TUC by providing information and insight which helped formulate our strategic approach. We particularly thank the Antigua Trades & Labour Union and The Antigua and Barbuda Free Trade Union for their input and guidance.
We would also like to thank the public for their patience during out time of negotiations. Notwithstanding this, the TUC and its constituents continue to appeal to the Government to delay the implementation of this tax measure until there is some semblance of economic recovery.