Government’s commitment to the development of a better tax compliant system has been reinforced with the establishment of the Large Taxpayer Office (LTO).
The LTO is part of a long-term economic framework of tax reform and auditing capabilities. The Office caters exclusively to the key three per cent of the country’s taxpayers who are responsible for paying some 80 per cent of total taxes, annually.
It is located on the first floor of the St. Andrew Revenue Service Centre, Constant Spring Road. Its main focus is as a customer service provider to companies which have sales, or turn-over, of more than $500 million annually, or contribute in excess of $50 million yearly to the tax department.
The LTO has been operating since April 1, but was officially opened on April 8.
Minister of Finance and the Public Service, Audley Shaw (second left), tours the Large Taxpayer Office (LTO) at the St. Andrew Revenue Service Centre on Constant Spring Road in Kingston, recently.
Following a trend which started in developed countries, LTOs are situated in places like Australia and Canada. Jamaica’s LTO currently has a staff complement of 32, spanning three units – audit, accounts adjustment and compliance, and registrar and administration.
Minister of Finance and the Public Service, Audley Shaw, emphasises that the introduction of the taxpayer office is in keeping with Government’s tax reform strategy.
Tax reform, Minister Shaw notes, is an essential element of Jamaica’s national development strategy. He says that the aim of the reform programme is to ensure that Jamaica has a tax system that is simple, fair and competitive.
“This will enable our tax administrators to interface with industry leaders in a more proactive and systematic manner, in order to improve service delivery and foster greater compliance,” Mr. Shaw said, when he announced its opening in the Budget Debate at Gordon House in April.
Minister of Finance and the Public Service, Audley Shaw, (right), addressing the audience at the official opening ceremony of the Large Taxpayer Office (LTO) at the St. Andrew Revenue Service Centre on Constant Spring Road in Kingston, recently.
General Manager of the LTO, Dave Jeffery, tells JIS News that 80 of Jamaica’s large revenue earners have been contacted since its opening. These taxpayers contribute about 60 per cent of the country’s taxes.
“They are quite welcoming of us…they see it (the LTO) as a step in the right direction: A move forward to have a relationship with the tax administration,” he says.
LTO clients fall primarily within five industries: commercial banks, financial institutions and insurance companies; telephone and telecommunications; hotels; bauxite; and, Government.
Mr. Jeffery said that a few other large taxpayers, which do not fit-into the five selected categories, were also being added to the list.
“They are also real large taxpayers and, because of how large they are, we could not overlook them,” he explained.
He also underscored that LTO’s main objective is not to become a “bull hound” for tax cheats, but more of a provider of a ‘personalised’ service.
The aim of the LTO is to interface with industry leaders on a proactive basis, dealing with critical tax issues that may prove costly to the taxpayer or industry, while obtaining input on critical tax policy issues, among other matters.
In an effort to provide the service to taxpayers, Client Relationship Managers (CRM) were appointed. Each CRM works, chiefly, with members of various industries and, by extension, specific companies. They are employed to assist with processing of Tax Compliance Certificate(TCC), processing of refunds and tax advice, among a myriad of tax paperwork services.
The office has six CRMs – five based at the Constant Spring Road branch and the other in Montego Bay, St. James.
“We have this one person, a point of contact you may call on whatever tax related issue. So the concept is quite welcoming by corporate Jamaica,” Mr. Jeffery says.
The LTO has already identified some 1,000 of the key three per cent corporate entities. In terms of initiating contact and providing personalised service, the LTO is operating in three phases.
In Phases one to three, only 454 companies are being addressed. Under Phase One, 80 clients are being contacted; Phase Two, another 120 companies to be interviewed as of October 2009; and, Phase Three, an additional 254 taxpayers for consultation in March, 2010.
The 32-staff cadre was pulled from various offices. Within the first month, employees were grilled on tax issues as well as work-relationship matters.
Mr. Jeffery highlights that the end result must be “quality service” provided to the essential taxpayers of the country.
He notes that it is reassuring that clients are accommodating toward the new proposal, and those who have outstanding accounts have exhibited a will to have accounts in line with the tax regulations.
Mr. Jeffery explains that face-to-face interaction is currently being held with the 80 taxpayers, following the issuing of correspondence and interviews via telephone. He says meetings are being held with representatives of the companies, some involving chief executive officers.
The LTO concept was born out of a study conducted by an arm of the International Monetary Fund(IMF). This was further strengthened by recommendations from the Inter-American Development Bank (IDB) and supported by work done by the US Treasury and the Internal Revenue Service.
The establishment of the LTO, however, will accompany other measures such as the consolidation of statutory deductions, effective July 1; improvement of inland revenue efficiency; and, the formation of the Forensic Data-Mining Intelligence Unit. These measures, being implemented during this fiscal year, are geared toward improving tax compliance and a reform of revenue system.