$27M Owed In Social Ins. Payments
As of November 2011 there were 2,677 companies which are 60 days in arrears owing over $27 million in Social Insurance contributions, Junior Finance Minister David Burt said yesterday [Feb.29] in the Senate.
The figures were released after Opposition Senator Toni Daniels tabled Parliamentary Questions for the Junior Minister yesterday.
When asked whether any company/vendor that is arrears on Social Insurance or Payroll Tax was awarded a government contract in 2011, Senator Burt replied that yes – some companies currently in arrears on Social Insurance Contributions and Payroll Tax have been awarded Government Contracts.
“By awarding contracts to qualifying companies, currently in arrears, Government can recover delinquent funds through offset. That is, a portion (5 – 10%) of the true contract cost can be withheld from contractor payments and put toward tax delinquencies,” said Senator Burt.
The three Parliamentary Questions and responses, follow verbatim below:
Q1. Would the Junior Minister please inform the Senate as to how many companies have failed to file a payroll tax return for any period from 1st January 2011 to 30th September 2011?
Answer 1: There were 281 companies who have failed to file a Payroll tax return for at least one quarter from 1st January 2011 to 30th September 2011.
Q2. Would the Junior Minister please inform the Senate as to how many companies are more than 60 days in arrears on paying Social Insurance and what is the total amount owed?
Answer 2: As of November 30, 2011 there were 2,677 companies which are 60 days in arrears owing a total of $27,234,210 in Social Insurance contributions.
Q3. Would the Junior Minister please inform the Senate as to whether any company or vendor that is arrears on Social Insurance or Payroll Tax has been awarded a government contract over the period from 1st January 2011 to 30th September 2011?
Answer 3: There have been some companies, currently in arrears on Social Insurance Contributions and Payroll Tax that have been awarded Government Contracts.
By awarding contracts to qualifying companies, currently in arrears, Government can recover delinquent funds through offset. That is, a portion (5 – 10%) of the true contract cost can be withheld from contractor payments and put toward tax delinquencies.
Qualifying factors for payroll tax include:
- The contractor/tax payer has met with the Office of the Tax Commissioner representative and has establishes a viable repayment plan.
- The contractor/taxpayer has to file and pay in full all current period taxes.
- Additional payments, obtained through offset or other means are made against the outstanding balance.
The matter of pension contributions and taxes in arrears is a serious concern of the Government. As previously illustrated with the establishment of the Debt Enforcement Unit the Government places a high priority on collecting outstanding amounts owed.
The Debt Enforcement Unit has had a significant impact on the ability of the Office of the Tax Commissioner and the Department of Social Insurance to collect outstanding receivables. The timely processing of and publicizing of writs has seen a significant increase in collections.
The Government will continue to take an aggressive stance in recouping tax and pension arrears in order to establish the settlement of Government debt as a priority.
Finally to assist tax payers in these difficult times, the Government has developed a pilot programme that will allow businesses that are in arrears with respect to payroll tax, but who are maintaining installment payment plans, to reduce their debt to Government by offering services of like value.
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So you don’t pay your taxes, get Government jobs so they will do the accounting for you on your taxes, then bill the Government double for the work… What a country…
hahahahah according to the Auditor General, a whole bunch of money is owed to our ‘government’……doubt we’ll ever see it repaid….LOL but not funny
I’m pretty sure I was told that if you are even ONE DAY LATE YOU PAY A 5% PENALTY – after 90 days its 15%. So 27M + 15% is???? how much do they really owe? Do they have to pay this? Please feel free to correct me if my amounts are wrong. It just p’s me off when I read this. When I have bid for governemnt RFP’s in the past one of the vriteria was that we provide proof that our payroll, pension, social insurance were all up to date! I guess this was only asked of some of us!!!! I might as well not pay as well so I can start getting awarded a contract every now and then.
I can wrap up your comments in 4 words….JOBS FOR THE BOYS
the more things change, the more they remain the same….OBA may continue the trend but I don’t believe in ‘better the devil you know than the devil you don’t’
well, well I am not surprised, I once worked for a contractor who had a MAJOR contract with government and NEVER paid one cent of social insurance,insurance or payroll tax. I spoke with a Govt. Minister about it and he told me to sue the contractor for the money. WHAT!! That money was owed to Govt. on my behalf. To this day I am still not sure if all has been paid. And the Inspectors that are suppose to collect these funds are a joke.
Absolutely mind boggling isn’t it. Well done to Toni Daniels for making this public. I don’t recall any mention of sorting this problem out in the budget. They’d rather go after pie-in-the-sky “new ideas” than get the friends & family to actually pay taxes.
There are legitimate companies who are simply trying to keep their staff employed in these difficult times.So the government has the option of taking them to court, putting them out of business (and still not collecting the taxes) and having even more unemployment. Work with legitimate businesses to establish some sort of payment schedule…even if the current quarter is not paid
Indeed, and I know of one such company, in a field where the most lucrative contracts are Government ones. The biggest contracts always fall in the hands of one or two ‘major’ players, the smaller companies fight over the scraps, and are effectively cut off from being eligible for Government contracts because they’ve fallen behind in taxes. And of course, the ‘major’ players are often on various Government boards and therefore have the ‘inside’ track. Cronyism and conflicting interests reign supreme.
These are not legitimate companies “trying to keep their staff employed”. These are crooks, collecting contributions from employees, and then keeping them.
Why don’t they go after the fat cats who owe millions? They’re getting rich while the government is putting up taxes for the rest of us.
Who are these people? They should publish a list of every employer who owes more than $50,000.
Name and shame.
Get the information out there, straight away. Public opinion might help make these crooks pay up.
Such a list was published maybe a year or so ago if memory serves.
The name and shame list should be updated and published regularly, not stuck on a shelf and forgotten.
I’ve searched for it and couldn’t find it, so if it exists it certainly isn’t easily accessed. It is definitely not on Gov.bm.
I don’t disagree, just saying that a list has come out before. I’m sure it will surface again, given that this story has surfaced in the news.
@ Mad Dawg – absolutely right.
We conduct business in an industry where a number of our competitors have been consistently in (heavy) arrears for both Soc Ins and P Tax contributions. This was happening way, WAY before this recession. The Auditor General’s “List of Shame” going back many years bears this out. That the list is typically printed in a Saturday RG with lower circulation doesn’t help with truly naming and shaming these businesses. Companies like ourselves who take great pains to conduct reputable and honest business are going up against dodgy, unscrupulous competitors – who effectively have less overhead as result of their prolonged and deliberate arrears in contributions.
To really rub it in, they can cry poverty and get Government contracts to “help” them out of their situation.
One of the worst repeat offenders was recently awarded arguably the largest single contract in our industry as a result of Bda’s two biggest banks outsourcing Facilties Management. Do the banks care? Does the new FM company care? Does their high profile overseas partner care? Not a whit, it seems… if the price is right, it doesn’t matter who you get in bed with.
Surely some companies in these times are having legitimate difficulties, but there are many who have been playing the game for years with no repercussions.
Absolutly disgusting…I got to beg for a truck when all my taxes and insurances are kept up to date, and these jerks GET WORK and don’t have to pay…Yet they will get a payment program…HOW ABOUT AN INCENTIVE FOR THOSE WHO PAY ON TIME, EVERY TIME…Maybe then the idiots who don’t pay might see the benefit as to all of us paying….I SAY SHUT THEM DOWN — No sympathy as they all sit in their fat houses, but don’t pay their bills. How disgusting…makes me want to shut down my business…and work side jobs….why NOT? Cause each summer I employ Bermudians – legally- and they and my clients count on me for the work!! SHUT THEM DOWN us law abiding folks could use the work!!
@ Mama Bear…I feel the same way. i get noting but grief when trying to apply for and pay for my trucks and I make sure that all bills are paid BEFORE I pay myself! I say do NOT ALLOW someone to license a truck or even their person bike or car if they are deliquent! I work hard and so do all my staff ! I would never STEAL from them by taking their money AND USING IT TO PAY my bills! SHUT THEM DOWN!
Let’s be real, if Government were serious about getting out of this debt the delinquent companies would have been targeted long before now. Did the companies who were awarded contracts whle being delinquent, really have any deductions made from there contract prices? Bet you they didn’t. Excuses, excuses, excuses.
We are tired of the spin.
WAIT A MINUTE! Someone help me understand so are they saying that even though social insurance gets taking out of our pay they have not been doing their part and paying what they should?
But they (The
Govt) is telling people like me who’s benefits that are paid by these business owners who are deducting my salary EACH MONTH, that if I am not current in my social insurance than I CANNOT collect a full pension when I turn 65 because of the non payment by this same employer…. what are we suppose to do then?
…but isn’t this outright theft/fraud in other words a felony committed by these Companies. Why isn’t someone from the Attorney General office all over this problem! Only in Bermuda….
Great question. It is illegal not to pay tax.
Or if it isn’t, I guess we can all tell Customs at the airport to go stuff it.
In fact, why don’t we just do that, if they can’t be bothered to collect $27,000,000?
Let’s not guess SpecialGirl. Let’s get a list of every employer who owes more than $50,000 out. Let’s see who is on it.
And they are harrassing me for a $50 Parking ticket. Go harass the real money owing
How can a Government let these companies go for so long without paying up…they sould be warned, given a certain time to “make good” and if they don’t comply, allowed to go bankrupt. Isn’t that how the rest of the world operates…… no wonder the Government has no money.
i can think of one company straight off the top of my head who isnt current with Social Insurance, Private Pension, Payroll Tax OR Health Insurance.
Hmmm. If I was a “betting man” I would bet the house that there are companies on the name and shame list, that are either owned outright or have significant ownership interests in them by members of our current government. Any takers??
If they published a list we would know for sure. A list of all taxpayers with more than $50,000 in areas.
No innuendo, no rumors, no speculation. Just a list, so we can see who is on it. Let’s see it.
If they won’t publish a list, we can draw our own conclusions.
Why should the magic number be $50,000? Why not a lot less? I mean if you owe money you owe money, $1 or $50,000 it all still adds up to a staggering 27MILLION dollars!!
Shame on every single company that is in arrears…I”ve been in business for 22 years and always have kept current. Always!
I admit its been hard some times but the rent, payroll tax, social ins. and health ins. has always been paid. Its part of business….honest business that is. If you can’t afford to pay then wind up your company. Come on Government get this sorted out and be fair to all the business that are paying.
No pity from here I’m afraid.
A staggering 27 million? So where is the outrage over the one billion three hundred million??
or the 27 million unaccounted for on the new courthouse, 20 million on a jetty in Dockyard, 40 million on Berkeley, millions at Bda Housing Corp, BLDC ???? At least the Social is owed .can be paid, can be recovered, will be recovered with some goading, but you will never see the amount the Auditor General can’t account for, 700 million! or is that too big to worry about.?
? There is definitely outrage over the $1.3bn in debt.
It is possible to be outraged about more than one thing at once.
I’m outraged about the $27m and the $1.3bn.
So I have deductions from my paycheck but those deductions have not been paid to Government! Is this not theft??
Anywhere else in the world the employer would be sent to prison for tax avoidance.
Over the years, the offenders has been listed in the local paper. Most of these names are quite recognizable. They usually live in multi-million dollar houses and drive luxury cars. I have absolutely nothing for our Government allowing these pieces of sh*t to avoid their responsibilities.
You make me sick Paula!!
I don’t give the OBA any credit either for making this an issue. Do they too think these thieves should not be held accountable??
…should read “I don’t give the OBA any credit either for NOT making this an issue.”
Malachi, it was Toni Daniels from the OBA that brought this to the publics attention!
What a bunch of BS. Name one companuy, Senator Bean that government has witheld monies owed for social insurance in order to recoup monies owed!? It is no secret(because many in your party have said it openly) that this government awards contracts to companies owned by people that’LOOK LIKE YOU”! If you are melatonin impaired in this country its no secret that you are at a real disadvantage if you are bidding for government contracts unless they have no choice. It all started with Berkeley at Proactive and the reverse racisrm is alive and well today. Oh, Im sorry, before people freak out….there area few on the light side that have sone okay by this governement. There have been a handfull of governemnt contaracts awarded to Island and Correia Construction and I see more and more Xerox and Ricoh big copiers ending uo in more and more government offices….not sure who ownsthat company…AF….SMITH. things that make you go hmmmmm….
If you don’t pay the monies owed AFTER deducting them for your employees paycheck that is theft!!!! Bermuda…this is your RETIREMENT money! Every peron can check to see if their payments are up to date my logging in to the social insurance website and putting in your sociial insurance number and date of birth.
If tgey can’t pay this, then they shouldn’t be in business. Take then down now.
Don’t worry, it’s only a matter of time before many businesses take your advice, close up and put more people out of work. Maybe those who are talking like they can do better should open up their own business, take some multi million dollar risk, hire people, pay the business share of social, payroll, health insurance,and the 50 other monthly bills…not so eager now are you?
I suspect alot of you work for someone and never made a payroll in your life. if anyone out there wants to solve the economic problems this Govt has been responsible for, get up and run for a place in Parliament, it’s a volunteer organization, as is building a business and creating employment.
The vast majority of people in business, the self-employed, the small business, the medium business, the great big company, etc really do make a huge effort to pay their taxes, whatever the purpose. There are times when you wonder what the hell for when you look around and look at the waste, self-serving benefits, and general indifference with which the political class and much of the civil service spend their way through those funds regardless of what they are earmarked for. I doubt very much that much of the uncollected $27 million went of lifestyle, partying, etc – these guys probably needed it pay their employees, their suppliers, bank loans, etc, all the stuff that creates an economy. In the meantime, the parasite classes just keep on spending though at least now they have the shame and good taste to pretend that they are not.