Phillips: Tax Collection Critical Element of new IMF Programme

The issue of tax collection is a critical element of the new medium term economic programme being pursued with the International Monetary Fund (IMF), and is fundamental to the country’s development strategy going forward.

This was emphasised by Minister of Finance, Planning and the Public Service, Hon. Dr. Peter Phillips, at the opening of a three-day Exchange of Information Workshop, being staged by Tax Administration Jamaica (TAJ), at its Office Centre Building, downtown Kingston, on March 13.

“There is no doubt that in the face of the stringent fiscal circumstances, an efficient (and) effective tax administration must be a central element of any effort to marshal a meaningful economic development strategy,” the Minister said.

The three-day workshop is supported by the International Financial Corporation (IFC) of the World Bank and the Inter-American Centre of Tax Administration (CIAT), and includes expert resource persons from other tax jurisdictions, such as the United States (Internal Revenue Service).

Participants will discuss: the legal basis for the exchange of information; and the role of tax auditors in relation to the exchange of information; as well as take part in the drafting of a document with “tailored” recommendations on how to effectively implement the exchange of information for tax purposes.

The Minister commended organisers for the “timely intervention,” which he said, is intended to address “issues of particular urgency."

These issues include tax evasion, money laundering and related fraudulent transactions, which the Minister observed, have been exacerbated by the "globalisation and the intensification of transactions across borders."

Dr. Phillips noted that these developments provide the opportunity for the unscrupulous to exploit gaps that exist between countries to evade taxes.

He further argued that recent developments support the view that there exists a culture of tax evasion, even among corporate giants, which not only deprives the national treasury of resources, but creates an atmosphere of cynicism among those who are compliant and “encourages others to avoid” paying their dues.

The Minister pledged that his administration, despite the pleadings of “powerful voices,” will do all it can to eliminate the problem.

“We are going to defeat the culture of tax evasion… and this workshop signals the development of the Tax Administration in the contest of tax reforms in which we will look at the rate of tax, the levels of personal and corporate tax, but it is also essential to have in place improved compliance and the elimination of the room for evasion,” he explained.

By Allan Brooks, JIS Senior Reporter