Published:Wednesday | May 25, 2016 |
A person recently called to ask about Garnet Schee. To clarify, he said “Mr Schee will take the money from anyone who owes you to pay the tax you owe.”
He meant ‘garnishee’.
I explained to the hapless caller that it was not the name of a person, but that it relates to a legal process. It is somewhat similar to what plays out in loan repayment by salary deduction, where the employer deducts an amount from the employee’s salary and pays it over to the financial institution to which the employee owes money.
In the case of taxes, the tax commissioner may order anyone holding money for a taxpayer including banks, lawyers and tenants to pay the sum to the tax authority to clear taxes owed. It contemplates the intercepting of loans or other advances to the taxpayer while the garnishee order is in effect.
Garnishment seems the opening prelude to what the prime minister and his finance minister hinted at as ‘enforcing compliance’ and combating ‘tax evaders and avoiders’.
The subject of ‘tax cheats’ is a buzzword nearing every budget day. In fact, the increase of GCT to 21.5 per cent on imported goods, the minimum business tax, and the 3 per cent withholding tax on services are all measures aimed at attacking noncompliance.
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