Thu | Aug 16, 2018

Letter of the Day | Politicians have no passion for tax collection

Published:Monday | October 3, 2016 | 12:00 AM


On Monday, September 26, the Caribbean Policy Research Institute (CaPRI) hosted yet another forum - this time a debate of the Jamaican pathology of tax non-compliance.

It would have been grossly naive, though, of anyone who attended to have entertained prospects of solace from any recommendation about the Jamaican authorities' unwillingness to enforce tax compliance in all earnestness.

So, playing the role of good host, CaPRI especially lauded the significant efforts made by Tax Administration Jamaica (TAJ) in this regard.

This well-deserved commendation for TAJ, though, made for a very interesting response that ensued from the audience: Is the country's political directorate willing to enforce tax compliance in all earnestness?

Among the gallant efforts made by the TAJ are the amalgamation of NIS, NHT and Education Tax; the introduction of new information management system; a new business registration 'Super Form', and a slew of other measures, including public education programme and enforcement. These efforts have been to the extent that in 2015, 56 per cent of survey respondents said they actually FILED income taxes compared to 81 per cent who indicated that they INTENDED to file in 2016!

Yet, the reality that obtains is an ESTIMATED 40-80 per cent informality in Jamaica's economy! Little wonder, too, that IMF estimates the compliance gap for general consumption tax (GCT) to be between 23 and 33 per cent of potential GCT revenues.

So, not surprisingly then, it was observed by the forum that the philosophy of 'listening attentively to what is being said, but more so to what is not being said' should apply to our beleaguered tax system. That is to say, our politicians declare how interested they are in remedying this problem, yet by their very palpable deed, it is quite the opposite.




Our politicians possess the advantage in this area. They are the first line of representation to the Jamaican taxpayer. Politicians encourage and incentivise individuals, in person, to vote, yet they NEVER do the same in championing the cause for tax compliance.

Politicians collect and spend taxpayer dollars, yet they seldom demonstrate to taxpayers that their hard-earned dollars are put to good use. Politicians themselves have a bad rap for non-compliance, evasion and not making timely declarations so as to pay their equitable share of taxes.

There is no motivation, therefore, for the few compliant taxpayers to continue paying, or for the non-compliant to commence paying. The indefatigable efforts of the TAJ will be of no avail until our politicians explicitly demonstrate, with good intentions, a willingness to collect tax revenue, even at the sacrifice of their votesx