The Government is currently negotiating a US$75 million loan with the United States Agency for International Development (USAID) to help finance its tax administration reform programme, Finance and Public Service Minister, Hon. Audley Shaw, has disclosed.
He says that, when finalized, the loan will finance, among other things, a new information technology system with “impressive” forensic data mining capabilities and the capacity to merge all databases.
Mr. Shaw said that with tax administration, size matters, and it will be targeting investment in tax administration and customs, on record.
“It is important because, it will allow us to broaden the tax base and (having) more contributors equals lower taxes overall. That is a mantra that I have always entertained, and I remain convinced that that is the direction in which we have to go,” the Minister asserted.
He was addressing the Jamaica Stock Exchange’s (JSE) sixth investment and capital markets seminar at the Jamaica Pegasus Hotel, New Kingston, on Wednesday (January 26).
In addition to USAID’s input, Mr. Shaw said that the tax reform programme is also expected to benefit significantly from the Inter-American Development Bank (IDB), which is lending the administration support on a study being conducted on the prevailing tax waiver regime.
Noting that the reform programme, which he described as a vital component of the government’s growth strategy, is at an advanced stage of development, Mr. Shaw advised that the undertaking will see a consolidation of three departments “under one roof” which, he contended, will facilitate “substantially greater efficiencies.”
He pointed out that, “broadly speaking,” Cabinet has instructed that ways be found to reduce waivers, simplify the tax system, and enhance compliance. To this end, improvements have already been effected, with the implementation of the new payroll deduction amalgamation programme, which commenced in December.
“We are receiving tremendous feedback on the new payroll deduction amalgamation programme, which allows businesses to pay all statutory payments, including the National Housing Trust (NHT) payments, at one place, at one time, and on one form, consolidated, and even on line,” he noted.
He said that under the administration’s comprehensive approach to tax reform, consideration is being given to lowering overall import duties, and eliminating much of the waivers in the process. He also pointed out that this is being done within the context of the impact it will have on prevailing agreements, such as CARICOM’s Common External Tariffs.
CONTACT: DOUGLAS McINTOSH