It’s the end of the month – and for most businesses that means business tax is payable and due in the next 15 days. That’s true for all registered companies, except BTL and that’s because the phone company is holding out on paying business tax. They are doing so on the strength of a so-called accommodation agreement – another secret deal signed by the Musa government which allows BTL to withhold business tax until it can realize its guaranteed 15% rate of return on investment.
But the Prime Minister said in the National Assembly on Friday that government has no copy of those agreements and took office with no knowledge of the accommodation agreement. And now, the government’s position is that the agreement is not valid – and the government is determined to collect the business tax it is owed. And how much is it? Well, according to the Prime Minister and Minister of Finance, it averages $1.5 million a month and BTL has not paid for January, February, or March and is expected not to pay for April.
That’s $6 million owing and now the Commissioner of Income Tax has made an assessment of what government is owed and filed an action against BTL. A summons has been issued in the civil side of the Magistrate’s Court and the matter was to be heard this week, but it has been adjourned until next week.
It’s a big matter for the lower courts, and will no doubt end up in much higher courts as the Ashcroft controlled company will likely choose to litigate to protect its position. But the Prime Minister confirmed that government is firm in its own position, and has taken legal advice which tells them that the agreements are not valid.
Of course, government cannot even release the agreements presently because they claim to be protected from public circulation by a confidentiality clause.
