TTMA raises concern over delayed VAT refunds

The Trinidad and To­ba­go Man­u­fac­tur­ers’ As­so­ci­a­tion (TTMA) has raised con­cern over de­layed Val­ue Added Tax re­funds and the ef­fect on busi­ness­es in sev­er­al sec­tors.

In a state­ment, the As­so­ci­a­tion said feed­back from mem­bers in­volved in the man­u­fac­tur­ing and ex­port of food and bev­er­ages, house­hold prod­ucts, and print­ing and pack­ag­ing shows that de­lays in re­ceiv­ing VAT re­funds are af­fect­ing op­er­a­tions and fi­nances.

The TTMA said VAT is col­lect­ed by busi­ness­es for the state and off­set against in­put VAT, with ex­cess amounts ex­pect­ed to be re­fund­ed. How­ev­er, the As­so­ci­a­tion said re­funds are be­ing de­layed for more than a year in some cas­es, with some claims out­stand­ing for sev­er­al years.

The As­so­ci­a­tion said sev­er­al man­u­fac­tur­ers have mul­ti­ple claims await­ing pay­ment, which it said ties up work­ing cap­i­tal used for op­er­a­tions and growth.

Ac­cord­ing to a sur­vey con­duct­ed among its mem­bers, the TTMA said de­layed re­funds are cre­at­ing cash flow prob­lems for man­u­fac­tur­ers. The As­so­ci­a­tion said com­pa­nies re­ly on work­ing cap­i­tal to meet pay­roll, pay sup­pli­ers, ser­vice debt, main­tain pro­duc­tion and sup­port ex­port ac­tiv­i­ty.

The TTMA said some com­pa­nies have tak­en loans or used over­draft fa­cil­i­ties to ad­dress liq­uid­i­ty is­sues, re­sult­ing in high­er fi­nanc­ing costs.

It said un­cer­tain­ty about re­fund time­lines has al­so af­fect­ed in­vest­ment de­ci­sions. It said some com­pa­nies have post­poned equip­ment up­grades, mod­erni­sa­tion projects and ex­pan­sion plans.

The TTMA said some firms have re­duced pro­duc­tion or de­layed growth plans while ad­dress­ing fi­nan­cial con­straints.

The As­so­ci­a­tion said ex­porters face chal­lenges in pur­chas­ing raw ma­te­ri­als and ful­fill­ing in­ter­na­tion­al or­ders due to de­lays in re­funds.

The TTMA said the de­lays al­so af­fect sup­pli­ers and oth­er busi­ness­es with­in the sup­ply chain.

It called for im­prove­ments in the ef­fi­cien­cy, trans­paren­cy and pre­dictabil­i­ty of the VAT re­fund process.