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Taxes - entertainment sore point

Published:Sunday | November 11, 2012 | 12:00 AM
Beenie Man
Elephant Man

Sadeke Brooks, Staff Reporter

We've all seen the embarrassing stories of entertainers whose assets have been seized for unpaid taxes. Yet, it seems many artistes are still not as compliant as they should be.

In 2007 the issue came to the fore when the tax authorities alleged that Beenie Man failed to pay over $29,290,116 in back taxes and $18,641,254 in penalties, bringing the total to $47,931,370.

A few years later Bounty Killer was in the spotlight when his popular Range Rover along with his Toyota Land Cruiser were seized by the Tax Administration of Jamaica (TAJ) because he was said to owe millions in taxes.

One year later in 2011, Elephant Man was not spared as the Special Enforcement Team of the TAJ conducted an operation at one of his homes in St Andrew and seized his red convertible Mercedes-Benz because he, too had arrears.

Speaking with The Sunday Gleaner recently, Elephant Man explained that his run-in with the TAJ came after splitting from his manager, Q45. He said his manager was the one filing his taxes throughout their 10-year working relationship. As soon as the split occurred, he said he was approached by the tax body.

Bigger interest

In addition to hiring a lawyer to take care of his affairs, Elephant Man says he now takes a bigger interest in making sure his taxes are filed and up-to-date.

"I got a new lawyer and him a deal with it, and me mek sure mi put that first. Other artistes need fi just pay dem taxes and stay on top of your game. Nuh mek no excitement and problem reach you. Instead of lose your house and lose certain things, just deal wid it," said the artiste, who recently shot a medley video for Crocodile and Badman Style.

Admitting that it is a problem in the industry, he said some persons fail to file their taxes because some are strapped for cash, while others claim they don't have the time.

While she could not give statistics, Meris Haughton, director of communications at the TAJ, said, "similar to other industries/sectors, as a group there is a general sense that entertainers need to be more serious about their responsibilities about paying taxes."

She noted that the TAJ does not have actual percentages as it relates to entertainers, but their level of compliance is less than desired.

"There is no specific programme in place geared towards entertainers. As it relates to their overall compliance we cannot substantiate the position of low compliance with any data, however, the general feeling is that they are not compliant with their filing of returns, and in instances where they file they either under-declare their income and/or fail to pay the declared amount. This position is arrived at based on results from cases completed recently that resulted in multimillion-dollar assessments," she said.

Nonetheless, Haughton said the TAJ has had programmes that aim to help persons in the entertainment industry to become more tax compliant.

Education programme

"TAJ has expanded its overall taxpayer-education programme by establishing teams in our seven Revenue Service Centres to meet the needs of taxpayers across the island. TAJ recently embarked on a comprehensive taxpayer-education drive, hosting seminars, workshops and participating in and staging expos across the island," she said.

"Specific to the entertainment industry, a tax seminar was held at the Edna Manley College [of the Visual and Performing Arts] earlier this year in collaboration with the Jamaica Reggae Industry Association (JaRIA). The information was well received and we have formed a partnership with the association to have similar sessions on other occasions."

Charles Campbell, JaRIA executive director and vice-chairman, confirmed the partnership and noted that through one of its bodies, Constitution, Advocacy, Lobbying and Membership committee, they hosted two similar seminars in 2009 and 2011. When these seminars take place, he says JaRIA members benefit as they are shown how tax is structured and the system for paying their taxes. In

addition, he said the TAJ has even helped some persons to fill out their tax forms.

But for the tax-related seminar that they plan to do in February 2013, "we want to flip it around and let the Tax Administration hear us make a presentation."

Meanwhile, financial analyst Dennis
Chung has a simple solution.

"Get an accountant to
work with them and bring their taxes up-to-date," he told The
Sunday Gleaner

In some cases, he says
artiste's managers are the ones who would hire the accountants. However,
they should "ensure that they have the skills necessary to file their
taxes because you don't want it coming back later on," he