IRC Commissioner General, Sam Koim, says the current tax on consultants is being abused by companies.
Koim said their concern is the manipulation of this tax arrangement by companies who engage people as consultants, but, who fill in line positions or jobs.
“There is a tax on consultants on short term or long term contracts. The concern that we have and something that is being abused by all this multinationals is, there are people they bring in and they are performing in-line positions or jobs, but they are getting them on short-term contracts and all of these that they pay just 15% of the tax and get away with it, instead of the progressive rate of tax that everybody is subject to,” said Koim.
Koim Said they will be working with State Agencies such as the Immigration and Citizenship Authority (ICA) to ensure the proper tax bracket is applied.
“There’s a lot of people who are making big money in this country but they are coming in as consultants instead of being employees. And a lot of top executives are on that kind of similar arrangement. That’s why we have signed an agreement with ICAso we are zooming in on who is coming in and the work permits to make sure that those people who are also filling in line positions will be subject to the normal tax (rate) that every other employee is facing.”