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Munroe wants outside help to nail tax dodgers

Published:Wednesday | March 11, 2015 | 3:00 AMEdmond Campbell
Professor Trevor Munroe

Executive Director of the National Integrity Action (NIA), Professor Trevor Munroe, has called on Jamaica's international development partners to pressure the Government into passing tough laws to crack down on large companies that evade the tax net.

Speaking yesterday at the Inaugural Fraud and Anti-Corruption Conference 2015, staged by the Office of the Contractor General, Munroe invited representatives from international bodies that attended the parley, to take an interest in pushing the Government to target big tax dodgers.

"Our foreign friends who are here, let us be clear: You cannot insist on lotto scam legislation - you get it done in six months - good thing. Why not take on tax evasion, too?"

According to Munroe, in a 2011 survey, 48 per cent of Jamaicans indicated that international development partners should have corruption as one indicator of the extent to which grant aid is given. He said in November 2014, more than 60 per cent of those interviewed expressed a similar view.

"The internal basis for reform and getting things done from a resistant authority needs to be complemented by external partners making their voices and presence felt," the NIA head stated.

Munroe told the audience at Knutsford Court Hotel that nearly three years after the Private Sector Organisation of Jamaica (PSOJ) made tough recommendations to turn the screws on large tax evaders, he has not seen any evidence that the Government is moving towards adopting those measures.

He said in a submission to a parliamentary committee in 2012, the PSOJ suggested that the tax authorities should "name, shame, prosecute and imprison large taxpayers".

"Subject to correction, I know of no case where a large tax evader has been put in prison in Jamaica, in contrast to other democracies around the world," he declared.

The NIA executive director said in the United Kingdom, the top 12 tax evaders in 2013 were convicted and are now serving 140 years collectively in prison.

Munroe was fielding questions yesterday from participants attending the conference. In his earlier presentation, he addressed the role of non-governmental organisations and civil-society groups in the fight against corruption.

"This is particularly painful because every IMF test we pass with revenue shortfalls, when you look at the line items of the revenue shortfall, PAYE (Pay As You Earn) is ahead of budget, corporate income tax as at December 2014 was 28 per cent behind budget, and in January 2015, it was 30 per cent behind budget," Munroe highlighted.

He said Minister of Finance Peter Phillips told his colleagues in Parliament last year that of the entities with $1 billion in sales revenue, at the end of the 2013-2014 fiscal year, 27 per cent filed no returns and 21 per cent paid no corporate income tax. That, he said, was a signal for robust investigation into possible corruption.

He said for every IMF test the country passes and revenue falls short of target, the administration has to cut expenditure, with hospitals, the police force and other critical areas of government impacted.

However, Major Johanna Lewin, commissioner of the Revenue Protection Division, said the country's tax laws were weak and suggested that little was being done to strengthen them.

"Tax evasion is not criminalised in Jamaican law. There are certain requirements of the commissioner general or of Tax Administration before you can even utilise some of the weak provisions in the Income Tax Act," she stressed.

She questioned why tax evasion was not a predicate offence (a crime that is a component of a more serious offence) under the Proceeds of Crime Act.