Reports of the alleged manipulation of General Sales Tax (GST) audit results by the senior management of that Governmental Department have been denied by the Ministry of Finance. The accusations surfaced from a leaked letter sent to the Solicitor General of Belize by a concerned senior GST officer. The allegations have raised serious questions regarding the management of the department, and as such, the Belize Chamber of Commerce and Industry (BCCI) have demanded an investigation into the allegations made by the GST officer.

The four-page letter dated December 28, 2016 suggests intervention at the highest levels of the department to assess businesses at much higher collection figures than those arrived at by the auditor. However, the auditor in question says he was called into meetings by his superiors and says that he reluctantly did what he was told to do, even though he knew it was wrong. The auditor also added that his higher ups furthermore instructed him not to show the agents the method used to assess, which is structured to yield the highest collection figure. He also stated that while some assessments went un-appealed, others were questioned by senior GST officers.

Some examples given by the auditor included cases whereby, after being assessed for a particular amount, the reports would come back from ‘up top,’ with instructions to collect higher amounts. In one of his assessments, the final amount was $30,000, but then it was increased to $71,000. Furthermore, he mentioned that he was instructed to do the same to other tax payers, but when it was pointed out that in one case, their method would have them owing the taxpayer, he was ordered to apply such method on a case by case basis.

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Ministry of Finance clarifies false claims of GST tampering

It has come to the attention of the Ministry of Finance that concerns have been expressed by certain representatives of the business community over allegations of supposed manipulation of General Sales Tax (GST) audit results by the senior management of the Department of the GST.

The Ministry of Finance rejects any suggestion of manipulation on the part of the GST Senior Management of any Audit carried out by mid-level to lower level GST Auditors and wishes to point out that under the provisions of the GST Act, the Commissioner of GST is responsible for the administration of the GST, and the assessment, collection and recovery of GST. Such responsibility includes the review and approval of audits after making any adjustments or choice of methodology that may be required in the course of such review. Thus, the Commissioner (and senior staff delegated by her) is expressly charged with finalizing to her satisfaction, including by way of making justified changes, audits conducted lower down the chain of command.

The opinion of the Solicitor General of Belize has been sought on whether the DGS Management is allowed to influence the outcome /final report and assessment of a GST Auditor’s work, after a GST Auditor challenged the right of the GST Management to do so.

In a letter of response dated 22 March, 2017 (copy of which is attached to this Release) the Solicitor General’s Office has stated categorically that “…it is highly improper for an (regular) Officer to challenge the method of assessment recommended by (senior) Management/ Supervisor of Audit and it is an attempt to bring a major revenue department into disrepute …”.

The Ministry also notes that there are provisions within the law for an appeal to be made by any Taxpayer dissatisfied with any audit signed off on by the Commissioner.

Finally, the Ministry notes that the power given to the Commissioner by law to review audits done by staff, is an absolutely necessary one. This is a matter of good Administration and the need generally for an ultimate backstop. But it is also particularly relevant because there have been cases, though there is no suggestion that this current issue referenced by the Chamber is one such, where taxpayers have sought to collude with GST staff to procure audit outcomes favorable to the taxpayer and resulting in the revenue being deprived of its rightful tax take. The Chamber, in view of its declared anti-corruption position, is no doubt as concerned as the Ministry to minimize that sort of occurrence.

The Guardian