There has been a lot of fuss about government’s January 1, 2010 tax imposition. The fact is that we have a financial crisis on our hands as a nation, and the money has to be found somehow to pay the bills.
When there is a crisis, all sorts of experts come out of the woodwork spouting all kinds of solutions… some workable, some not. But so far, I haven’t heard anyone talking about how government should go about collecting taxes that are already owed.
Strange enough, many of those who are complaining, fussing, and casting blame against who did this or did that, haven’t been paying their own taxes, but they do expect government to find money somehow to take care of business as usual.
Even among our entrepreneurs and small business owners, some of whom are considered to be making “a bag of money” simply refused to pay their taxes, or even to turn over statutory deductions hey have collected on behalf their employees, or even the General Consumption Tax (GCT) their customers paid them for goods and services purchased.
I have no intention of joining complainers’ brigade. I have one simple suggestion… a suggestion that government can put into effect to collect most, if not all, of the outstanding taxes, and so, make sure that all future taxes are collected. If not, offenders pay the consequences.
The suggestion is for government to consider introducing a “Tax Lien on businesses”.
This not a new idea, but here’s how it could work:
Taxpayers who owe the Tax Department a business or individual debt should be subjected to the Tax Department’s placing a lien on their assets. A lien should be one of tools available to the Tax Department for use to enforce payment of taxes owed.
So, what’s the significance?
Well, a lien is a form of security interest placed against a taxpayer’s assets. These assets could include homes, vehicles and businesses.
The lien should remain on the asset, in this case the business, until the lien amount is paid in full, or until the Tax Department accepts bond for payment of tax.
However, before the Tax Department places this lien a taxpayer’s business, it should be required to send the owner a demand letter. From the date of the demand letter to pay the balance in full or make payment arrangements, the recipient should be given 10 days to so.
Taxpayers who do not work to pay off the lien, for example, would then risk having their assets levied. A levy, unlike a lien, is an actual seizure of taxpayer property to pay off tax debt.
Finally, taxpayers who experience economic hardship, such as foreclosure, eviction, incarceration, and unemployment, should contact the Tax Department to request that the lien not be enforced until such time as the taxpayer has the ability to pay.
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