Forgive the error of my tax returns, Oh commissioner!
Everald Dewar, Guest Columnist
A new GCT return will be rolled out in January 2015. The new form accommodates all the recent changes in the law but has become a veritable minefield through which one must tread with painstaking care.
At the introduction of GCT in 1991, I recall an unfortunate individual, who had responsibility for completing and submitting returns for a company, got rather confused with the boxes that had to be completed. He ended up overclaiming $590,000 in input tax.
The commissioner picked up the error and corrected the return by raising additional assessment and imposing penalty and interests.
The company objected to the assessment, the basis of the objection being that the return was so wrong it should not be considered a proper return, and requested that they be allowed to revised and refile the return.
The authorities dismissed the objection on various grounds, one of which is that GCT is intended to be a self-assessed tax. Consequently, the taxpayer is responsible for submitting prompt and reliable returns.
Once a return is made, it is a return even if it is incorrect. And to ask for an amendment to be done so as to cure a defect in a return retrospectively after the commissioner's amendment would go against this principle.
It means that no class of error can invalidate a return.
Well, now! What if it were sent in 'blank', would it constitute a return? And let us say a return is filed with a minus figure in boxes 6 and 11 of the form, this would be such a fundamental mistake, wouldn't it negate the whole return? This can occur where the preparer said the business issued more credit notes than it billed out to its customers for the month. In that case, the piece of paper filed is so clearly wrong that it has no credibility. It contains such a fundamental error that it spells nonsense.
What is needed is a mistake-relief provision that would allow for rectification of patent error that invalidates the form as a proper return, and mitigates the effect of penalties, interest, and surcharges.
But back to the real issue. At present, anyone can set up practice as an accountant or taxation expert in Jamaica.
I agree with Eric Crawford, the recent inductee as ICAJ distinguished member for 2014, who said during his acceptance speech that it is now time to regulate the whole accounting profession.
But I wish to state in particular that the work of persons offering tax advice should be monitored and controlled. The provision of dishonest or incompetent tax service is a growing problem in Jamaica, although one would need to do some research to quantify how much of a problem there is. This writer is suggesting that a steering group be set up to consider how the accounting and tax profession can best be regulated.
Crawford mentioned that some persons have assured almost legendary status due to the sheer horror of the tax service provided - service that the professional qualified accountant would never countenance.
Some persons operate on the basis of how little taxes their clients pay, while not having the basic fundamental skills needed to interpret and apply the tax laws. This they solve by making a phone call to the local Tax Helpline or the Technical Specialist Unit, while priding themselves on who they know or associate with in high places.
Therefore, although steeped in error, they are
adamant that with their contacts being at the highest echelons, the
'authorities' cannot deny them.
There are instances
where tax investigations have been sparked by a number of telephone
discussions with such 'tax advice experts', apparently sparked by the
cluelessness of the tax practitioners.
may have a reasonable knowledge of GCT and income tax, but that does not
make him or her a tax specialist.
Taxation is so
complex in its elements these days that practitioners find it a
challenge to keep in mind all the issues that need to be considered in
any given set of circumstances.
circumstances where rare tax issues arise, many accountants will need to
advise themselves on how to proceed. This is where an experienced and
well-trained tax expert comes in.
Everald Dewar is
senior taxation manager at BDO Chartered Accountants in Kingston.