Businesses' new deadlines for accounting switch
The Revenue Commissioner, Matafeo Avalisa Viali-Fautuaali'i, has issued new dates for businesses to adopt a new tax invoice monitoring system (T.I.M.S.) but warned no more extensions will be granted.
In a public notice, Matafeo noted the extension for businesses to comply with the new real-time accounting system follows many requests for extension of time to comply with the T.I.M.S.
But the Commissioner said there would be “no further time extensions.”
T.I.M.S is an initiative of the Ministry of Customs and Revenue (M.C.R.) to increase tax compliance and crack down on the hidden economy and tax evasion.
Original plans for a phased introduction of the new requirements for businesses to employ new computer monitoring systems would have required several to become compliant by this year.
Businesses were grouped into five lots, according to their revenue status, each with a different intended deadline for the adoption of the new accounting system.
The more than 200 group one businesses - which included business with sales exceeding $1 million - had originally been required to comply with the new system by 1 July of this year. That date has now been extended until 1 January 2021.
(Certain businesses had already been granted exemptions from the deadline on a case-by-case basis).
Similarly, the second group slated to introduce the new accounting system had been scheduled to begin using the system on 1 October of this year. Their new deadline is 1 April 2021.
The third group, which had previously been expected to be in compliance by New Year’s Day, will now have until 1 July next year to implement the new system.
Groups four and five are now expected to commence using the new real-time monitoring system by 1 October 2021 and 1 January 2022 respectively.
Group five is composed of small businesses such as corner shops.
“Please kindly note that these are our [final] time extensions for every taxpayer in each Group [to which you have been] assigned [to] by the Commissioner,” the statement said.
Matafeo suggested all businesses register for the new system now and install T.I.M.S. at a later date.
“We welcome with much anticipation our business taxpayers who want to voluntarily comply and [which are] ready to register and commence [the] implementation of T.I.M.S.,” the Ministry’s statement said.
“You do not necessarily have to wait for your invitation [but are] most welcome to contact us now and we will provide [...] support.
“There are a number of Point of Sale and products that have been accredited [for use as part of T.I.M.S.] and published on the Ministry’s website.
“Businesses with no invoicing system are strongly advised to consult the published material to select the best option that suits the nature of your business activities.
“For those who have an invoicing system which is not yet accredited, please contact your vendor to inform them of the requirement to have their product accredited.”
The introduction of the new real-time monitoring position had drawn opposition from the business community.
Individual small businesses said they would be obliged to spend up to $6000 ti $10,000 on new point of sales hardware that was compatible with the Government’s requirements.
(A free, mobile-phone based version is available for download).
Larger businesses have also said that rearranging their existing accounting and sales processes to meet the new requirements will entail considerable outlays.
Ah Liki Wholesale General Manager, Asiata Alex Brunt, told the Samoa Observer earlier this year that the company was expecting a bill of $200,000 to become T.I.M.S. compliant.
Matafeo noted that, effective from the date of the notice, all business owners; partners; and general managers or financial controllers will have to become an authorised contact point for the M.C.R. on the issue of T.I.M.S.
“We will no longer accept tax agents, accountants, consultants, or resellers of various [point of sale] systems, to liaise with the Ministry on specific issues relating to T.I.M.S. compliance,” the Minister said.
“This will make it easier for the Ministry to explain directly our requirements to the taxpayer who is also the authorised person so as to avoid miscommunication and additional costs to the taxpayer.”
Matafeo acknowledged businesses that have already installed T.I.M.S. and begun to issue receipts in accordance with the system’s requirements.
“The M.C.R. appreciates and applaud your courage and resilience to comply despite the challenges of many factors beyond your control,” the Commissioner said.
“ Please continue with your [commendable] voluntary compliance path and [the Ministry] will continue to provide the priority support and assistance that is available at any time.”
Last week, Minister of the Customs and Revenue, Tialavea Tionisio Hunt said over $42 million of sales had been recorded by T.I.M.S. from more than 48 businesses.
The Government is entitled to 15 per cent of those sales, or some $5 million, depending on the nature of the company filings the Minister said.
"This is the whole point of having [...] T.I.M.S. so the [Ministry] can determine how much [... in] sales the company collects so they can pay the accurate [amount of taxation required]."