PROMOTERS owe millions in GCT

Millions of dollars are slipping out of the Government's coffers each year because of delinquent live entertainment show promoters who fail to file and pay over their General Consumption Tax (GCT).

Sources have told The Sunday Gleaner that Summerfest Productions, promoters of the annual Reggae festival Sumfest in Montego Bay, owes in excess of $47 million and has failed to file GCT returns since April of this year.

There is a 30 per cent penalty for failing to file returns in addition to a two and a half per cent monthly interest charge on the tax that is owed. These penalties have brought the Sumfest GCT debt up to its whopping $47 million mark.

"I remembered having seen something to that effect in the papers and asked about it and they (the other directors) told me something about working towards clearing it. You would have to talk to Mr. Gourzong or Robert Russell about that," said Godfrey Dyer, a director in Summerfest Productions.

The Sunday Gleaner called Johnny Gourzong and Robert Russell every day on multiple occasions up to Friday of last week but were unable to talk to either director on this issue. Messages were left but calls were not returned.

"We're losing millions in that industry (entertainment) because a lot of people aren't registering. Once you're putting on an event you're required to pay tax," said Norris Miller, technical specialist with the GCT office.

Summerfest heads a list of promoters as registered taxpayers, which includes Pulse, MKB Productions (Heineken Startime), Solid Agency (Fully Loaded), Bounty Killer (Saddle 2000), the National Dance Theatre Company and Supreme Promotions (Sting). The Sunday Gleaner understands that these other registered taxpayers are not in the red as their GCT books are in order.

However, there are still a number of other companies where it is not clear if they are registered and the GCT office has no idea how much they might owe. Those in this grey area include Flames Promotions, which puts on 'Rebel Salute'; Gibbons Production which puts on 'Teen Splash'; R.A.S. Promotions, which puts on 'Beer Vibes'; Champs Models, the promoters of 'Manhunt' and Clifton Bailey (Capleton) who puts on 'A St. Mary Wi Come From'.

Under the current arrangement between the GCT office and the promoters, the taxpayers are required to charge tax for their events. The tax is normally included in the fees that the public is required to pay.

Tax due from shows are from two possible sources, according to the GCT office.

"The promoter is required to pay GCT, which is 15 per cent of the gate receipts. If there is a sponsor and the sponsor gave cash, the cash amount is also taxable and the promoter is required to pay tax on that also," Miller explained.

One promoter, who is unclear about what she now owes, said her company might fall in that grey area.

"We were just registered because we had done a name change. We were registered under the old system and had not been active. We recently re-registered the agency with the new name. We went in and spoke to them about it too," explained Debbie Stanley of Champs.

Solomon Sharpe of R.A.S. Promotions, who puts on the annual show 'Beer Vibes' and is on the list of unregistered persons, said "I have no comment. It's a technical matter at this time and I can't say anything."

The promoters who are not registered are being invited to do so. "If they (the promoters) are putting on an event, they are supposed to be registered with the GCT," said Norris Miller from the GCT office.

As he indicated, not only is the Government losing millions but they were not able to even estimate the true extent of their losses.

Ignorance of the law is no excuse when it comes to filing the returns. Even if a promoter is putting on a charity event he or she is still required to pay up the GCT. If they don't collect it, they are still required to pay the GCT owed to the government. "Unless the Minister waives the requirement in terms of charity events, you are still expected to pay the GCT," he said.

While the promoters are hard pressed to pay their taxes, the GCT is making it clear that their tax burden need not be high since they can claim a credit when filing returns.

Miller said the promoters could apply for credit if they had paid for ads which would have required them to pay GCT. He added if they had used the services of persons who were also registered taxpayers, or used the services of persons who weren't taxpayers then they could also apply for credit.

Miller said promoters who put on events all through the year were required to pay income tax but this did not apply to the annual shows.

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