Wed | Mar 20, 2019

Government relents on tax bills

Published:Thursday | July 31, 2014 | 12:00 AM

Daraine Luton, Senior Staff Reporter

The order of a judge of the Supreme Court will be required for a lien to be issued against the property of a tax debtor.

The Senate yesterday made amendments to the Tax Collection (Miscellaneous Provisions) and the Tax Penalties (Harmonisation) bills, which were last week passed in the House of Representatives despite opposition from the parliamentary Opposition.

In addition to amending the lien clause, the Tax Penalties bill has been radically altered in line with proposals from Opposition Spokesman on Finance Audley Shaw for payments made by a tax debtor to be first applied to the principal.

The bill, which was passed in the House, had proposed for the amended Tax Collection Act to have payments made by a tax debtor to be first applied to interest, second to penalties, third to surcharge and last to principal.

Principal first

That clause, however, has been turned on its head with the Senate agreeing that the payments made by a tax debtor should first be applied to principal, second to interest, third to penalties and fourth to surcharge.

But even as the Senate passed the bill, Opposition Senator Dr Nigel Clarke warned that it is critical that checks and balances be instituted to reduce the likelihood of State abuse.

"When the State comes up against an individual, it is awesomely powerful. Even though the motivation is to go after tax cheats ... the power of this bill can be brought against the individual in the hills of Clarendon," Clarke said.

The version of the Tax Collection (Miscellaneous Provisions) Act passed in the House had proposed that the commissioner general be given the power to issue a certificate outlining the amount owed by a tax debtor, which, when registered in the Supreme Court, would have the same effect as if the certificate were a judgment obtained in the court against the debtor.

But amid outcry from sections of the parliamentary Opposition and sections of the business community, the Government foreshadowed that it would be amending the proposed clause.

New clause

Yesterday, Justice Minister Mark Golding presented the Senate with a new clause, which proposes that the commissioner general will have to make an application to the Supreme Court for an order to have a certificate registered in the court, which may be used to collect tax debt.

"The Government is committed to the social partnership which has been forged with other key stakeholders in the society, which is essential if Jamaica is to successfully navigate though the challenges of the current medium-term economic programme," Golding said as he piloted the bill through the Senate.

Yesterday he said: "We will not arrogantly disregard the concerns of our social partners and we are, therefore, prepared to make adjustments in the interest of preserving the national concerns, which is necessary for Jamaica to maintain as we travel this difficult road together."

The application for the registration of a certificate will have to be made to a judge in chambers. In making the decision whether to grant the request for the registration of the certificate, the judge is obliged to consider whether in making the order it would be unreasonable to do so.

The judge may not make the order for the commissioner general to issue a lien against a property unless he is satisfied that the tax debtor has acknowledged the amount owed, including by way of filing a tax return, and the amount has not been paid.