Financial Crime World

GRENADA: Taxpayers Face Substantial Penalties for Non-Compliance with VAT Law

Tax authorities in Grenada have issued a warning to taxpayers who fail to comply with the Value-Added Tax (VAT) law, stating that they will face substantial penalties, including fines and imprisonment.

Offences and Penalties

The Comptroller of Customs and Excise has outlined various offences under the VAT Act, which can result in severe consequences for non-compliance. Some common errors committed by taxpayers include:

  • Failure to apply for registration, display of VAT Registration Certificate, notify changes affecting registration, or comply with requirements after cancellation of registration
    • Fixed penalties ranging from $2,500 to $10,000
    • Summary conviction to fines not exceeding $30,000 and imprisonment for up to three years
  • Failure to keep accurate records, comply with notice for recovery of VAT, or provide VAT documentation
    • Fixed penalties of $500 to $5,000
    • Summary conviction to fines not exceeding $10,000 and imprisonment for up to 18 months

Intentional Fraud

Taxpayers who intentionally commit fraud or make false claims for refund may face even more severe consequences, including:

  • Prosecution
  • Imprisonment for up to three years

Compliance Recommendations

To avoid these penalties, the Comptroller recommends that taxpayers familiarize themselves with their obligations under the VAT law. This includes:

  • Displaying VAT-inclusive prices of goods and services
  • Issuing sales receipts and VAT invoices
  • Keeping accurate records

Registered businesses are advised to develop a plan to avoid all penalties and offences under the VAT Act.

Additional Consequences

Taxpayers who fail to comply with the VAT law may also face:

  • Risk of having their goods or services seized by authorities
  • Revocation of VAT registration and subsequent loss of tax benefits
  • Repeated non-compliance can result in significant financial consequences

The Comptroller has emphasized that it is essential for taxpayers to understand their obligations under the VAT law and take steps to ensure compliance. The penalties for non-compliance are severe, and taxpayers who fail to comply with the law may face significant financial consequences.

Resources

For guidance on various aspects of the tax system, including what is VAT, how to register for VAT, basic supply rules, and VAT documentation, registered businesses can refer to a series of leaflets published by the Comptroller’s office.