Fri | Sep 22, 2017

Letter of the Day | Demand notices on taxpayers unfair, unethical

Published:Wednesday | August 17, 2016 | 8:09 AM

THE EDITOR, Sir:

Please allow me space to express my thought on unfair demand notices received from the TAJ by some taxpayers.

Employers who do not pay over statutory deductions when they are due are delinquent taxpayers. The amounts not paid over could tally millions, even billions! If the employer is a government department or agency, the delinquency is no different.

When an entity does not honour its obligation to file tax returns such as the monthly and annual payroll returns, the information about its delinquency is obscure. Apart from the administrative tools of the TAJ, one way to determine the wrongdoing is when a taxpayer who has additional income files a tax return and the information on that taxpayer's earnings come to the notice of the TAJ.

Government departments and agencies that don't file and pay over regular payroll tax owe the Government. They owe the Government for statutory deductions from employees' salaries and the matching employer contributions. These offending entities are not pushed to pay the outstanding amounts. Instead, when a government employee files a return because that employee has additional income, such employee is harassed by way of demand letters to pay the outstanding amounts.

The declaration (tax return) by the taxpayer, who is also a government employee, should coincide with the filing of the annual return by the government department or agency. Cross-reference using the TRN should highlight that the government department/agency is delinquent in paying over the deductions. If, however, the department did not file the mandatory S02 form, there would be no information to cross-reference.

 

SHOULDERING THE BURDEN

 

Should, therefore, the TAJ go after the offending government department/agency or pursue the compliant taxpayer? What about those employees who don't file a return because there is no need to do so? It seems unfair for the taxpayer who played by the rules to shoulder the burden of trying to get the government department/agency to pay up. The taxpayer has already suffered the burden of the amounts deducted from gross pay.

If Circular #2 dated January 9, 2014, file number 107/022, under the signature of Devon Rowe, then financial secretary, is adhered to, the situation outlined above ought not to have occurred. So non-conformity to this instruction is a breach of established rules.

In any case, the TAJ has the administrative tools to get delinquents to honour their obligations. We think the offending government departments should pay up promptly. And any interest and penalty be the liability of the offending government department or agency. All reference to liability should not be for the taxpayers' account. Issuing a demand notice to the taxpayer in a situation like the one outlined above is unfair.

NEVILLE ROBINSON

Partner, A&N Robinson & Associates

robinson_associates@cwjamaica.com