Company fined $15,000 for charging church VAT

A MOUNT HOPE-based company felt the full wrath of the law yesterday when a magistrate slapped the maximum fine of $15,000 for illegally charging Value Added Tax (VAT) on items sold to a church. The company was found guilty of charging the VAT though it was not registered with the VAT Office. Magistrate Margaret Alert imposed the sentence on the company for charging VAT on body bags which the Church of God Prophesy, of Penn Trace, Cunupia, had purchased.

On April 15, 2004, the Church of God Prophesy bought 15 body bags from the company at a cost of $25 each. The company charged the church $397.50 in VAT on the total sum. However, the company’s invoice did not bear a VAT registration number and the church reported the matter to the Board of Inland Revenue (BIR). An investigation was launched by the BIR’s Criminal Tax Investigation Department. Advice was sought from the Director of Public Prosecutions’ Office.

Criminal Tax Investigator, Rawle Sookhoo, charged the company: “A company not registered under the provisions of the VAT  Tax Act, on April 15, 2004, sought to recover from the Church of God Prophesy, Penn Trace, Cunupia, a sum represented to be in respect of tax to wit, VAT at the standing rate of 15 percent namely the sum of $397.50 contrary to Section 23 sub-section 2, of the VAT Act, Number 37 of 1989.” The case, heard in the Third Magistrates’ Court, Chaguanas, began before Alert on November, 30, and was completed on December 12. State attorney in the BIR Department, Karla Prime-Pantor, prosecuted. 

The company pleaded not guilty to the charge. One of its directors had testified that the company was led to believe that VAT could be charged pending an application for a VAT registration number. Pastor Maurice Jones of the Church of God Prophesy, testified. However, Prime-Pantor submitted that no such application was pending on the company’s behalf. In giving her decision yesterday, the magistrate imposed the $15,000 fine with an alternative of 28 days in jail.