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EDITORIAL - Jackboots no place in corporate offices

Published:Tuesday | May 8, 2012 | 12:00 AM

This newspaper has consistently urged the Jamaican authorities to aggressively collect taxes owed to the Government, so that everyone pays his fair share, and to apply the law to those who cheat the national coffers.

For improving compliance with existing tax measures is the best way to ensure that the Government obtains the income to do its business without having to apply new ones and/or place additional burdens on the same narrow band of individuals and firms that meet their obligations.

But a robust tax-enforcement strategy, as we perceive it, does not translate to puffy, goose-stepping, jackbooted commissars, flanked by weapon-laden Praetorian guards, marching into the offices of presumed offenders. Which, of course, is the image painted by the telecoms company, Digicel, of last Friday's raid on its corporate offices by agents of Tax Administration Jamaica (TAJ).

According to the company, the TAJ officials were supported by police personnel with high-powered rifles who prevented many members of staff from leaving the building at the end of the workday.

The tax authorities insist that they were appropriately armed with a search warrant, issued by a high court judge, and that the police who accompanied the TAJ officials "acted professionally at all times".

At issue, apparently, is a dispute between TAJ and Digicel, a company owned by Irish interests, over general consumption tax (GCT) owed by the mobile telephone service provider.

Digicel says it was offended by Friday's incident, especially since it had already provided all the information demanded by the tax authorities "pursuant to ... (their) order, and which the Telecommunications Act allowed".

This newspaper is in no position to comment on the substance of the tax dispute. Nor do we question the right of the authorities, after due process, to sequester relevant information from companies subject to tax enquiries.

However, we make two observations on a broader principle of approach to enforcement.

First, dramatic raids/searches, whether on firms or individuals, to confiscate documents ought to be a last resort after robust investigation and analyses lead to an inescapable conclusion that information is being withheld. Hard-won reputations and expensively built global brands can be at stake.

Second, robust tax enforcement does not mean physical intimidation, of the type claimed by Digicel, but denied by the authorities. Nor does it have to lead to the disruption of a firm's operation.

The Digicel factor

While the Digicel factor - it is a foreign-owned company with a sexy brand that broke Jamaica's telecoms monopoly a decade ago - adds to the drama of this development, the implications transcend a single firm and/or its ownership. For even if in this case the police did not carry high-powered weapons and behaved with the utmost courtesy, it is a fact that Jamaican police, even in the conduct of the most benign operations, are often armed with high-powered weapons. The logic of this defeats us.

It is also, too often, the case that police personnel who accompany state officials on enforcement operations are not as courteous or professional as the TAJ says those who went to Digicel were.

Whatever the final truth of Friday's event, it is a public-relations fiasco for a Government keen on enticement of private, including foreign, capital. Hopefully, the authorities will learn lessons therefrom.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.