Jamaican Gov't forfeits $3.3b in property taxes
The Jamaican Government has been forced to give up approximately $3.3 billion in property taxes that were not paid and exceeded the statutory period for collection.
The amount was disclosed in a report from the auditor general, Pamela Monroe Ellis, that was tabled in the House of Representatives last week.
The report said over the financial years 2011-12 to 2015-16, Tax Administration Jamaica (TAJ) legally wrote off property tax totalling $3.26 billion representing amounts owing from the financial years (FY) 2004-05 to 2008-09.
"What the law (Property Tax Act) says is that if amounts are not collected and no action has been taken to collect same, then it is written off automatically after seven years," Meris Haughton, chief corporate communications officer, TAJ, told The Gleaner.
"If it's a fraud matter or a matter had been started in the courts, those will stay."
The TAJ collects property taxes on behalf of the local government, which manages the funds.
The auditor general said the "TAJ was unable to provide details on the number of properties in arrears covering the period FY2004-05 to FY2008-09, which represents the period of write-off of outstanding property tax".
According to the auditor general, as at May 2014, 631,170 (or 79 per cent) of the total number of properties (797,880) on the tax roll had outstanding property tax obligations totalling $13.5 billion up to seven years.
On a parish basis, she found that the level of property accounts in arrears ranged from 75 per cent for Westmoreland to a high of 83 per for Manchester.
The auditor general's performance audit was to determine if the TAJ was managing its property tax operations effectively and efficiently. It also determined whether the tax agency had systems in place to maximise property tax collection and enforce compliance.
The audit found that TAJ achieved an average 90 per cent of the property tax collection target.
But that achievement, it said, was linked to the dollar value of the property tax and does not consider the number of properties.
The value of property tax collected increased by almost three times to $6.5 billion the last financial year from $2.5 billion in 2011-12.
Monroe Ellis said this was mainly the result of an increase in the property tax rate in April 2013 and not an increase in the compliance rate.
She said that with less emphasis placed on targeting the number of non-compliant properties, TAJ was ineffective in ensuring a high level of compliance among registered properties.
Among the recommendations is for the TAJ to "expedite strategies to improve the accuracy of its property tax register, thereby enabling greater efficiency in the use of resources for property tax collection and enforcement".