IDB, IRS to Assist Jamaica’s Tax Reform Programme

The Government’s tax reform programme will benefit from the input of the Inter-American Development Bank (IDB) and the United States’ Internal Revenue Service (IRS) and Treasury Department, Finance and the Public Service Minister, Hon. Audley Shaw, has announced.
Addressing Scotia DBG Investments’ Corporate Investment Seminar at the Terra Nova Hotel, Kingston, on Thursday (October 22), Mr. Shaw said the IDB was currently undertaking a tax expenditure study which would be made available to the administration in November.
The IRS and US Treasury Department have responded favourably to the Government’s request for assistance in enhancing their revenue collection capabilities. These come as the Government moves to address revenue shortfalls currently being experienced, particularly through non-compliance in statutory payments.
“It is estimated that for every $1 billion that (Jamaica) earns at customs, $500 million (is given up) in waivers. That can’t continue. That’s being reviewed,” the Minister informed.
Regarding the IRS and Treasury Department interventions, Mr. Shaw said that they have started to give some assistance.
“They have been down, they have sent down some consultants who have been working with us. I met with the Assistant Secretary of the Treasury in Instanbul (Turkey) recently, and I asked her to ramp it (assistance) up. I need more technical support on the whole compliance area,” he explained.
“I continue to say (that) if everyone in Jamaica were to pay his or her taxes, in accordance with his or her income, we wouldn’t be talking about persistent fiscal deficit today, we would be talking about fiscal surpluses,” the Minister stated.
While acknowledging that issues pertaining to the administration’s tax collection capacity have resonated in discussions with the International Monetary Fund (IMF), Mr. Shaw expressed confidence of a successful conclusion to the negotiations on a new standby agreement in November.
“There is no question that there are issues that relate to our capacity in terms of tax collection, which is very difficult. We have an environment in which people have become totally satisfied with persistent evasion and avoidance of paying taxes. We have put it on the table that we want help, and the IMF has offered to help us, and we have accepted their offer,” Mr. Shaw said.