Wed | Dec 1, 2021

HEART hands over info on illegal tax

Published:Monday | June 7, 2021 | 12:13 AMJovan Johnson/Senior Staff Reporter
Edward Gabbidon, chairman of HEART.
Edward Gabbidon, chairman of HEART.

THE HEART/NSTA Trust says it has now provided to the finance ministry information sought on an unauthorised tax it has imposed on hundreds of travelling officers.

However, in its latest communication to staff, the agency did not say whether it has ceased implementing the measure, in compliance with a finance ministry instruction more than two months ago.

The agency has also not explained to employees why it continued to illegally tax their salaries two months after the directive.

The Ministry of Finance ruled in March that HEART’s 2017 fuel policy, through which the tax is imposed, was “ ultra vires” and “inconsistent” with public-sector staff orders and circulars on travelling allowances.

HEART’s management updated staff last Tuesday following a Gleaner report the day before that revealed that the Office of the Prime Minister (OPM) was “deeply concerned” that the agency was not being forthcoming with the finance ministry.

HEART is under the direct oversight of Prime Minister Andrew Holness.

“I want to assure the staff that the matter is being handled in a transparent and objective manner,” said Novelette Denton-Prince, the acting managing director, who admitted that the agency’s response to the ministry was “protracted”.

But HEART’s memo to staff has raised internal concerns about how the agency was handling the issue, which forced the OPM to write to the agency’s chairman, Edward Gabbidon, demanding his “urgent attention”.

In its March 16, 2021, letter to HEART, the OPM said it had received a letter dated March 1 from the finance ministry which complained about HEART not being forthcoming with information.

That letter was copied to then Managing Director Dr Janet Dyer.

TWO-MONTH DEADLINE

As well as instructing that the policy “ought to cease with immediate effect”, the finance ministry gave HEART two months to provide additional information to enable it to make a final determination on the fuel policy.

However, in her staff communiqué on Sunday, Denton-Prince, who has been in charge of the agency since April 8, said “the information came to my attention” at a meeting on May 28, almost a week after The Sunday Gleaner made the issue public.

The May 28 meeting, she said, was convened with officials from the Ministry of Finance and the Public Service (MOFPS) to determine what HEART was to submit.

“A timeline of May 31, 2021, was given to produce all outstanding information and documentation, and this was completed as stipulated. MOFPS has committed to act promptly on the matter,” Denton-Prince said.

Denton-Prince was listed as present at an August 2020 consultation with Tax Administration Jamaica officials who told HEART that taxing employees’ entitlements was wrong.

The issue was first brought to HEART’s attention by an employee in 2015 and then to the OPM, which, last September, referred the issue to the technocrats at the finance ministry.

Under its Fuel Allocation Policy, HEART abandoned the traditional benefit of mileage paid to travelling officers and used, instead, a fuel-based approach, where it advanced petrol (240 litres per month) and taxed the amounts consumed by each officer.

In Government, mileage, which goes with vehicle upkeep, is a non-taxable allowance. The policy allegedly breaches the finance ministry circulars and public-sector staff orders, which do not permit substitution.

It is not clear how much in unauthorised taxes was collected over the years.

The Jamaica Civil Service Association and the Jamaica Teachers’ Association say that hundreds of travelling officers affected by the policy should be refunded.

HEART has not replied to any Gleaner questions on the issue.

Meanwhile, Denton-Prince has officially been appointed acting managing director of HEART from June 1-August 31, correspondence to staff announced last Wednesday.

She was previously tasked with overseeing operations from April 8-May 31 as the entity struggles to settle its leadership after the board chose not to renew Dyer’s contract in March.

jovan.johnson@gleanerjm.com