New laws to enhance tax collections
Everald Dewar, GUEST COLUMNIST
My 15-year-old son was this year about to embark on his first summer job and I advised him that he is required to pay tax to the government on his earnings.
"But it's mine. I am the one who worked for it," he replied. "In addition, I am under eighteen."
"Yes, but it is the law that requires that you pay tax on what you work for; it matters not how old you are," I hastily replied.
"Well, I will not let them know about it," he said.
Although coming from the mind of a minor, this natural resistance to paying taxes is inherent in all normal mortals. Is it innate - something contained in the forbidden fruit containing the knowledge of both good and evil? There is little doubt that most will see the paying of taxes as necessarily good, but an evil, nevertheless.
Last October, while we occupied our joints with chik-V and our minds with the impending threat of Ebola, Parliament passed into law amendments to the Income Tax Act, Tax Collection Act and the Revenue Administration Act. Under these amendments, the commissioner of taxes has authority to provide information to credit bureaus regarding taxes owed and is allowed to publish the names of delinquent taxpayers.
The commissioner can now require a person (the first person) who holds money belonging to another who owes tax (the second person) to turn over the funds belonging to the second person to the Commissioner.
In addition, the commissioner can register a Certificate of Tax Payable with the Supreme Court, creating a judgment debt and a lien or charge on property of a person owing taxes.
I have spoken to a number of persons within the accounting profession who see these amendments as another burden placed on the backs of the already downtrodden taxpayer. Some expressed the view that however honest and conscientious they are, Tax Administration Jamaica's (TAJ) presumption of taxpayer dishonesty is unpalatable and contrary to the basic concept of justice. It is for this reason we as tax practitioners are between a rock and a hard place. Whereas TAJ may believe we are in league with Beelzebub, some of our clients think we are in league with TAJ - where does that put us?
Many see electricity theft as the same thing as evading taxes which is not confined to the dispossessed and poor, but has been detected among the wealthy.
They see the Government as just playing the numbers game, and the TAJ, in seeking to counter tax evasion, as reneging on its responsibility to the honest taxpayer.
One person thinks the safeguards to protect the taxpayer within the law are not available, does not feel assured that the TAJ has operated fairly, and sees no remedy is available to taxpayers were the TAJ to operate unfairly.
Taking the case of pay-as-you-earn (PAYE), it was introduced and intended to be a mechanical collection procedure for the convenience of employees. It would solve their tax problems and help their budgeting.
However, nearly 60 years on, it is all a different story. Most view PAYE as being for the Government's benefit in order to collect the maximum tax at the earliest possible instance.
In essence, the things that are of Caesars, the Eighth Commandment and the legal prohibition against theft, makes it is dishonest and wrong to take anything that belongs to someone else. In my son's thinking, this is exactly what the Government would be doing to his holiday pay. On the other hand, the Government takes the view that the evasion of taxes is theft committed against the state.
In time, my son will soon come to the thinking, as many people do, that the Government is stealing from him to acquire things for itself.
As he left the table and started climbing the stairs to the bedroom, he was singing almost inaudibly:
"Annie are you okay, are you okay Annie? ... You've been hit by and struck by a smooth criminal".
The line is from Smooth Criminal, one of Michael Jackson's signature songs about a woman, who has been attacked in her apartment by a 'smooth' assailant.
I seem to recall being called a criminal during my time as a tax gatherer years ago. Could he be throwing stones? Nay - the boy is not there yet!
Everald Dewar is senior taxation manager at BDO Chartered Accountants in Kingston. Email: firstname.lastname@example.org