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Finance minister demands 40% more from Jamaica Customs

Published:Sunday | July 3, 2016 | 7:00 AM
Minister of Finance Audley Shaw
Major Richard Reese, Commissioner of Customs.
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Minister of Finance Audley Shaw expects to increase revenues from Jamaica Customs Agency by up to 40 per cent with the implementation of new measures aimed at cutting down corruption and underinvoicing.

He will hold Commissioner of Customs Major Richard Reese responsible for hitting that target.

Sunday Business estimates suggest Reese would need to improve collections by up to $11 billion to deliver on the mandate. Implicit in the numbers is the cost the Government puts on port revenue leakage.

"I want revenue increases of between 20 and 40 per cent. That is creating equity in the tax system," Shaw said in remarks at the National Integrity Action (NIA) Roundtable on Curbing Tax Evasion last Thursday.

The Government of Jamaica in 2011 signed a series of agreements with the Inter-American Development Bank to automate a number of its procedures at the ports, including the Port Community System (PCS) spearheaded by Port Authority of Jamaica, the Automated System for Customs Data (ASYCUDA) system being roled out by Customs, and Revenue Administration Information System at Tax Administration Jamaica (TAJ), Shaw said.

The ASYCUDA operates as a web-based application for the payment of transactions. It aims to replace most paper-intensive processes with online procedures that will include payments, manifest submissions and declarations.

The PCS aims to create greater efficiency in the processing of shipments, through real-time access to information by stakeholders, including the Port Authority, Jamaica Customs, regulatory agencies and freight forwarders.

"When we combine ASYCUDA and the PCS and deliberately root out corruption at Customs, then, believe it or not, we can increase the revenue from Customs by anywhere from 20 to 40 per cent," said Shaw at the roundtable led by NIA Executive Director Dr Trevor Munroe.

"That is my target, and I am establishing that target with Major Reese publicly," Shaw said in a challenge to Reese, the commissioner of customs and head of the Jamaica Customs Agency, who attended the roundtable.

Efforts to clarify the timeline for the new targets were unsuccessful, but if the deliverables are supposed to be immediate, they appear to go beyond the figures contained in Budget documents tabled by Shaw in May.

 

HIGHER TARGET

 

In fiscal year 2015-16, the latest Revenue Estimates & Financial Statements (REFS) show Customs accounted for $29.5 billion of government revenue - which was a near ten per cent improvement on the previous year's performance. The target for this year is $33.5 billion, as stated in the REFS report, which implies expectations of a 13 per cent increase in customs revenue.

If the finance minister's instructions relate to this fiscal period, a 20 per cent increase over last year's intake would shift the Customs target to $35 billion. Hitting a 40 per cent target requires growing Customs revenue to $41 billion.

Instead of collecting $4 billion more this year, Reese is now being asked, it appears, to deliver between $6 billion and $11 billion more.

ASYCUDA is now 80 per cent implemented, said Shaw. The previous CASE system at Jamaica Customs operated with the myriad satellite applications that did not include the full functionality required of a state-of-the-art fully integrated customs management system. The ASYCUDA, provided through the United Nations Conference on Trade and Development, offers a more efficient technical solution.

steven.jackson@gleanerjm.com