Nearly quarter of Jamaica's big businesses not paying taxes on time
Daraine Luton, Senior Staff Reporter
SOME 27 per cent of businesses with sales of $1 billion or more do not file tax returns and 21 per cent of them do not pay taxes which are due, Finance Minister Dr Peter Phillips has revealed.
The minister, who was speaking during a debate this week on two bills to enhance the collection of taxes, also revealed that for companies with sales of $150 million or more, some 56 per cent are not filing income tax.
Ainsley Powell, commissioner general of Tax Administration Jamaica (TAJ), told The Gleaner in a recent interview that there is a compliance problem as too many taxpayers fail to file or pay on time.
The Government, in its updated memorandum of economics and financial policies, has told the International Monetary Fund that it would be improving large taxpayer administration through several measures, including the hiring of 50 auditors between March this year and next year.
It also stated that there would be an increase in the number of audits completed in the large taxpayer office.
Phillips on Wednesday said the way in which many Jamaicans approach their obligation to paying their taxes is a sad commentary on the country. He said that unlike in other jurisdictions, where the tax authorities are seen as serious, in Jamaica, "too many think that the tax authorities here are a joke".
"All of you inside here know of the situation which exists today, where many professionals offering services say 'bring cash only'… $500,000, $600,000. It is wrong. It is dishonest," the minister said, while noting that many tax evaders are among the most privileged citizens.
While some members of parliament pointed the fingers at professionals such as lawyers and doctors, Phillips said he was not yet "throwing stones at any particular group".
The minister, however, fumed that "some of these same people who hold dual citizenships or others go over [to the other countries] themselves to file. Many of them are residents of other jurisdictions and apply and meet their obligations in those jurisdictions zealously".
Through the Tax Collection (Miscellaneous Provisions) Act, which has been passed by the House, every person who fails to file a tax return within the time required is liable to pay a penalty of $5,000 per month for each month that the filing is late.
Additionally, late filing could attract up to a maximum of $1 million in addition to any other penalty that may be imposed on the person in respect of failure to file a return.
Ongoing efforts to improve the ease of paying taxes include steps to promote e-filing and e-payments. The bill now needs the consent of the Senate and the assent of the governor general to allow the TAJ to establish an electronic communication system to facilitate tax collection operations, including the filing of returns, services of notices and payment of taxes and issuance of receipts.