By Dennise Williams, Staff Reporter
Michael Surridge (left), chief technical director of the Financial Crimes Unit, with Michael Ammar Jnr., president of the Jamaica Chamber of Commerce, at their monthly board meeting held at 85 Duke Street yesterday. - Winston Sill/Freelance Photographer
THE JAMAICA Chamber of Commerce (JCC) was addressed by Michael Surridge, chief technical director of the Financial Crimes Unit, at their monthly board meeting held at 85 Duke Street yesterday.
His frank and forthright presentation concerned the widespread smuggling of goods into Jamaica by large firms who pay little or no customs duties, pay no income tax and pay no GCT.
Not only do companies employ a myriad of tactics to defraud the Government of revenue, Mr. Surridge asserts that the overall attitude of the country is one that applauds persons who 'beat the system.' However, the Government must take some of the responsibility, as he lambasted the continuation of the Tax Compliance Certificate (TCC) system as one TCC can be bought for $3000 and really does nothing to stop the widespread corruption. He advocates for a one-stop shop tax paying system, where the TRN would be enough to show the online tax situation of each holder.
To illustrate the frustrations of collecting customs duties and other taxes, Mr. Surridge gives an example through case studies. "Right now, my team is investigating the case of 13 containers that disappeared from the port. They were refrigerated containers." The significance of this is that refrigerated containers are not inspected at the port; they are inspected at another location. The smuggler thought to take advantage of this. He was only partially successful.
"We have X- ray machines that can view the contents of the containers, plus we have closed-circuit TV on the port that monitors movements. First, I don't want to give away what the contents of the containers were, but the invoice said chicken back (almost everything imported illegally into Jamaica is chicken back as this attracts no duty). It was not chicken back. Secondly, we had on camera the port worker who drove the containers off of the port. His response, when confronted, was that he was paid and instructed to drive them off. He doesn't know by who."
But the real clincher was the fact that since the goods were refrigerated, they couldn't be sold as Mr. Surridge said, "at Coronation Market to the small man. This type of situation needs business people to purchase the goods. We have evidence of business people that you all know, buying the goods for up to $1 million in cash. When they put these goods into their stores, they don't legally charge GCT on the items as this would give them away to the authorities."
WORKING CAPITAL
Actually, Mr. Surridge stated that while GCT was charged to customers, this was not paid over to the Government. This gives the company 15 per cent additional working capital that honest companies do not have.
"Last year, we identified $500 million in GCT collected and not paid over." But not to be left out, the 'small man' is part of the problem. Mr. Surridge explains. "Last Christmas the market was flooded with smuggled cigarettes and liquor. During the holiday season, one major company that had their grand opening, the attendees were supplied with smuggled alcohol. What people don't know is that these types of activities put Jamaicans out of work. Companies like Carreras pay a fortune in duties but cannot sell their products because they cannot compete with smuggled goods."
One of the contributors to this problem is the attitude of vendors. "We can spot the illegal cigarettes on site, but as one vendor said to me. 'Take my goods, but by tomorrow, I will have more because it is very profitable for me'." And what is especially frustrating to Mr. Surridge is the fact that there is no imprisons time for smugglers even when they are caught.
"In the 14 years I have been at this job, not one person has been to prison for fraud, tax evasion or smuggling. Jamaica imprisons persons who smuggle out one pound of ganja smugglers bring in 20 containers into Jamaica and nothing happens. For example, in 1995 we confiscated the goods from a man who smuggled them in. In 1996, his case was before the Court. In 1997 he was convicted. In 1998, he appealed the verdict. In 1999, he appealed the verdict on the appeal. In 2000, he lost the case and asked for time to pay. He received 18 months. During this time, mind you, he built an enormous house costing the world, but by the time the 18 months ran out, he asked for more time to pay. The judge said, 'take this man to prison.' The next day, we received a cheque."
