Wed | Aug 16, 2017

CaPRI gives thumbs up to Tax Administration

Published:Wednesday | September 28, 2016 | 9:00 AM

Tax Administration Jamaica (TAJ) is being praised by the Caribbean Policy Research Institute (CaPRI) for its drive to improve collections through voluntary compliance, but the think tank is also prodding the agency to spend more time educating Jamaicans on the different ways to pay up.

"Our number one recommendation is 'keep on doing what you're doing, Sammy'," said CaPRI co-executive director Damien King at the presentation of the think tank's latest research paper focused on tax compliance.

"Continue the process of consolidation and simplification and facilitation. Much has been done but it is all in the right direction and appropriate for Jamaica," King said at Monday's event.

King said the present course of action at the TAJ, voluntary compliance, is a better alternative to enforcement.

"Using the approach of enforcement is extremely costly because it requires a large amount of resources to be devoted to be largely going after individual taxpayers. You need a well-funded tax administration, and most importantly, you need an economy with relatively high incomes," said King, who is also an economist and head of the Department of Economics at the University of the West Indies.

Among the other recommendations coming out of CaPRI is that the TAJ must continue educating the staff about systemic changes and the new orientation to customer service. He also urged the tax department to continue finding innovative ways of educating the public about the new ways of tax collection.

"New ways of engaging the public, particularly small businesses, has to be identified. Our survey identified that there is a tremendous amount of ignorance about the new measures and new facilities that exist," King said.

He argued that engaging small businesses would yield the most for TAJ's efforts since that sector is under-represented when it comes to current business registration and filing of returns.

CaPRI is also recommending that the TAJ explore new and more innovative ways of incentivising tax payment especially using online methods. TAJ should even consider differential tax rates for using online services, King added.

neville.graham@gleanerjm.com