Tue | Sep 25, 2018

Auditor general wants explanation for missing targets

Published:Friday | March 6, 2015 | 12:00 AM
Monroe Ellis.

Noting that tax-revenue targets have not been achieved in the last seven years, Auditor General Pamela Monroe Ellis said the Ministry of Finance should assess the compliance measures to be undertaken by Tax Administration Jamaica (TAJ) and Jamaica Customs Agency, to attain the revenue target.

Monroe Ellis, in her report on the 2015-2016 Fiscal Policy Paper, said the assessment of the compliance measures should be factored into the revenue projections, in light of the consistent

revenue shortfall.

The finance ministry has targeted the collection of $402 billion in taxes, the expected impact of enhanced compliance activities will lead to greater collection.

"These compliance activities are forecast to bolster tax revenue flows by about $8 billion or 0.5 per cent of GDP," the ministry said.


compliance failed


But Monroe Ellis noted that the ministry has, in the past, said it would use increase compliance to boost revenue collection and this has not materialised. She said the Ministry of Finance should explain in future Fiscal Policy Papers (FPP) the reasons step-up compliance actions did not lead to the expected revenue increases that were initially targeted. She also said the ministry should clarify the measures that will be undertaken in order to overcome the difficulties in achieving the revenue targets from step-up compliance.

Tax revenue for the April to December period was $9.7 billion below the $258.6

billion projection.

In the most recent FPP, the Government said TAJ and Jamaica Customs have stepped up their compliance activities to keep collections at least in line with budget for the remainder of the year.

The Government of Jamaica will closely monitor the fiscal situation and has identified expenditure restraint measures to ensure that the primary surplus remains on track with the programmed 7.5 per cent of GDP target in the extended fund facility, in the event that the yields from compliance activities are not sufficient to meet the fiscal targets.

Dr Peter Phillips, the minister of finance, told the Standing Finance Committee of Parliament that TAJ and Jamaica Customs have stepped up their "administrative machineries in an effort to boost collections for the remainder of the current fiscal year ending March 31".

"The efforts thus far have yielded positive results, with preliminary figures showing that positive results as collections in January 2015 were on track with target. Nevertheless, if revenue and grants fall below the anticipated results in the final quarter, some expenditure adjustments will have to be made to ensure that the key target of 7.5 per cent of GDP of the primary surplus is achieved," Phillips said.

The minister said that current estimates are for a shortfall of revenue of $10 billion.