Samoa Observer

Businesses on notice over accounting switch

Read the article

Businesses on notice over accounting switch

By Soli Wilson 02 August 2020, 10:00AM

The Ministry of Customs and Revenue (M.C.R.) is threatening to temporarily close businesses that have failed to meet the deadline to switch to its new tax monitoring system for retailers. 

The Tax Information Monitoring System (T.I.M.S.) is being rolled out across Samoa in progressive phases.

The more than 230 businesses chosen to be in Group 1 had until July 1 to comply with the new regulations.

The T.I.M.S. system records transactions in real-time and is intended to cut down on tax evasion by automatically calculating and notifying the Ministry of the taxes owed on transactions. 

But in a letter issued to businesses, the M.C.R. Commissioner, Matafeo Avalisa Viali-Fautuaali'i, gave businesses in the first group a final reminder to meet their obligations to implement a new accounting system that was in compliance with T.I.M.S.  

The Samoa Observer understands that the Ministry had not inspected all businesses listed in Group 1 to check if they were in compliance with the new system before issuing the letter.

“As Commissioner, I am amicable in granting this Final Reminder Notice to fulfill your obligations within seven working days in receipt of this letter,” the letter reads.

“Should you not comply within [seven] working days, our Ministry will enforce necessary enforcement penalties that may also include temporarily closing down of your business under regulations 30 and 32 of the regulations.”

The letter also reminded that failure to comply could make non-compliant businesses liable to a fine of $10,000 upon conviction or a term of imprisonment not exceeding 12 months, or both.

“In the event that you have complied with your obligation under the Regulations when you receive this notice, please kindly disregard,” the letter continues.

Tax law requires a business to have a point of sales device that compiles with its requirements to record and transmit transactions in real-time.

The Government has made a free option of a compliant system, based on a mobile application, for businesses to use. 

But several businesses say that the free version is not feasible for businesses that process large volumes of transactions. 

Meanwhile, the Minister of Customs and Revenue, Tialavea Tionisio Hunt expressed his disappointment in “big companies” who are in the first group of companies that have requested more time to comply with the regulations.

But at least one large business, Chan Mow wholesale, has said that switching over to the new system will come at costs of up to $200,000.

The $3 million Tax Invoice Monitoring System [T.I.M.S.] enables the Ministry to track and cross-check whether or not taxpayers are paying their taxes in full.

The Ministry says the main objective of the policy is "levelling the playing field".

The next group of businesses (Group 2), will be required to start rolling out T.I.M.S. by October.

 



By Soli Wilson 02 August 2020, 10:00AM

Trending Stories

Samoa Observer

Upgrade to Premium

Subscribe to
Samoa Observer Online

Enjoy unlimited access to all our articles on any device + free trial to e-Edition. You can cancel anytime.

>