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War on waivers - Hundreds of millions missing the tax net

Published:Sunday | March 25, 2012 | 12:00 AM
These images are representative of items for which waivers were granted.
These images are representative of items for which waivers were granted.
These images are representative of items for which waivers were granted.

The proposal by the Private Sector Working Group for the elimination of discretionary waivers, with limited exceptions, continues to generate heated debate across the island with the 'for' and 'against' waging a heated verbal battle.

Discretionary waivers account for hundreds of millions of dollars avoiding the tax net based on an unclear system which hedges on ministerial decisions.

According to the private-sector body, taking away the power from the finance minister to grant discretionary waivers will benefit the businesses engaged in the production of goods or supply of services. This, the group believes, will ensure a level playing field in the granting of tax breaks that will ensure that Jamaica benefits and not any one individual.

However, the working group accepts that taxpayers, many at the bottom of the economic ladder, will no longer benefit from price discounts on the imported items because of these waivers.

Affects development

But the opponents say the discretionary waivers are an important part of the country's development and that the absence of the tax at entry protects small firms, including many in the manufacturing and agricultural sectors.

A look at the discretionary waivers granted from November 2011 to January 2012 shows religious and charitable organisations as well as government institutions getting the bulk of the tax breaks.

But several individuals and commercial entities have also benefited.

Among the non-charitable companies and individuals who received a sizeable tax break are importers of race horses and motor vehicles as well as individuals and companies bringing in red kidney beans (red peas). Jamaicans consume hundreds of tons of red kidney beans weekly in various popular recipes in homes and restaurants. Local red peas production was hit by the bean golden yellow mosaic virus several years ago. This virus is the major limiting factor in local red peas production, accounting for a 60 per cent reduction in red peas in Jamaica since 1993. This has resulted in the importation of red peas to meet Jamaica's needs.

Here are samples of some of the waivers granted since November 2011

November 2011

1 Tout Pret Distributors Additional Stamp Duty (ASD) waived $561,486.28 (importation of red kidney beans)

2 CJ's Discount Store ASD waived $950,721.91 (importation of red kidney beans)

3 Fresh and Direct Limited ASD waived $416,970.89 (importation of red kidney beans)

4 Chas E Ramson ASD waived $789,014.08 (importation of red kidney beans)

5 River Raft Limited Total tax waived $83,097.67 (importation of rafting gear)

6 Jamaica Football Federation Total tax waived $101,220.09 (importation of refereeing and coaching course material)

7 Jamaica Olympic Association Total tax waived $4,573,010.53 (importation of wrestling mat, gears)

December 2011

1 Jamaica Boat Cruises Total tax waived $106,142.16 (importation of snorkels, fins, tie straps etc.)

2 Howard L. Hamilton Total tax waived $3,216m558.24 (?) (importation of 14 horses for breeding)

3 Robert S. Dabdoub Total tax waived $838,919.25 (importation of one horse)

4 John Ramnon Total tax waived $713,688.43 (importation of one Rand Roller)

5 West Portland Development Fund/Daryl Vaz Total tax waived $215,453.81 (local purchase of one 20ft container)

6 Canjam Trading Total tax waived $1,223,418. 57 (importation of one container of red kidney beans)

7) David Wright Total tax waived $38,692.92 (importation of one chainsaw)

January 2012

1 Major Dionne Sinclair Total tax waived $252,601.00 (importation of personal effects)

2 Douglas Vaz Total tax waived $1,120,080.34 (importation of 2012 Honda CR-V)

3 Tastee Limited Total tax waived $4,824,411.12 (importation of beef trimmings)

4 Caribbean Producers Limited $9,007,155.13 (importation of beef cuts)