Nicholas
Omar Anderson, Gleaner Writer
TAX EVADERS, including suspected drug traffickers, who acquire assets by shady means, often refuse to contest taxes levied on them, says Clive Nicholas, Director-General of Tax Administration.
Speaking with The Sunday Gleaner last week, he said the tax department has various ways to calculate how much money tax-evaders owe Government.
"We identify a person's net worth at a certain point, maybe five or six years before, compared with his or her present net worth," Mr. Nicholas said, noting that the tax department does not distinguish between the source of one's income.
"As far as we are concerned, we see income as income," he noted. "Over the years, we've done assessments on people involved in various activities. We don't assess somebody because they are in an illegal activity. We assess because we see that (the activity) as an income."
He said that the tax department has periodically converted a person's real estate into income, especially as it relates to individuals who might be suspected of trafficking drugs. According to him, the tax department acts on the assumption that there is a generation of income if there is an increase in a person's net worth.
"So if five years ago, you were only worth $1 million, and now you are worth $10 million, your net worth would have increased by $9 million," Mr. Nicholas told The Sunday Gleaner. "So, it is up to the taxpayer to prove where the increased net worth comes from."
While declining to provide statistics showing how often suspected tax-evaders abandon appeals against the tax department's calculation of their net worth, the Director-General said some people will dispute the amount of tax they are required to pay, by bringing documentary evidence. Mr. Nicholas said persons whose net worth has increased over a period of time through inheritance, usually bring related documents to support their new economic status.
"It works both ways," he said. "Some people try to find evidence while some people back off."
Meanwhile, Mr. Nicholas refused to confirm whether the 1980s practice still obtains where tax officials visited the properties of suspected tax evaders to make a visual assessment of the amount of tax those persons ought to pay.
"They (tax officials) don't have to go to people's places to get information," Mr. Nicholas said. "They get information from documents dealing with real estate and motor vehicles in particular. Sometimes they get information from the security forces, or they can get information through treaty partners".
