Tue | Jan 22, 2019

Liquor cheats to pay millions

Published:Monday | June 15, 2015 | 12:00 AM

Persons who illegally engage in the practice of adding water to spirits in a store or warehouse are to be hit with an enormous increase in the fine as the Government moves to change the provisions under the Excise Duty Act.

The law is being amended to impose a fine of $2.5 million if a person adds or causes to be added any water to any spirits in a distillery or warehouse without the consent of the proper officer. This crime previously attracted a $2,000 fine.

Arguing that the penalties that were on the books for operating illegal distilleries lacked the necessary teeth to deter breaches of the law, Jamaica's tax chief has expressed the hope that the vastly enhanced fines may cause people to avoid engaging in the activity.

"What was happening was that it was not necessarily punitive enough so you find that people would just pay up and continue," Ainsley Powell, commissioner general of Tax Administration Jamaica (TAJ), told The Gleaner.

A ministerial order signed by Finance Minister Dr Peter Phillips has seen the movement of fines from as low as $1,000 to as high as $1 million under the Excise Duty Act. For instance, the penalty for the illegal manufacturing of any spirituous compound for sale is to move from $2,000 to $2 million.

The amendment to the Excise Duty Act also states that any person who opens a warehouse in which spirits are stored except in the presence of the proper officer, or who in any way clandestinely opens any warehouse in which excisable goods are stored and gains access thereto warehouse shall for every such offence incur a penalty of $5 million. This fine is being moved from $5,000.

Phillips, in giving notice of his intention to modify the regime, said in March that "the existing fines, fees, and penalties have not changed since 1942, and that it was felt that the insignificant sums do not pose any deterrence to non-compliance".

"The Government believes it is necessary that in reforming the tax system, antiquated and outdated structures are addressed," the minister said.

The illegal denaturing of spirits will now attract a fine of up to $5 million, up from $1,000. Under the law, if a person prepares or attempts to prepare any denatured spirits for use as or for a beverage or as a mixture with a beverage; or sells any denatured spirits whether so prepared or not as or for beverage, or mixed with a beverage; he shall be guilty of an offence.

The law defines denatured spirits as spirits to which a substance has, or substances have, been added to render such spirits noxious and non-potable.