Revenue up for First Three Quarters of Fiscal Year

Director General for Tax Administration, Clive Nicholas has said that up to December 2003, revenue collection for the current financial year was 26 per cent more than the amount for the corresponding period in 2002.
The Director General pointed out however that although this was a significant achievement the Tax Department was behind the projection of $132 billion for the 2003/04 financial year, by about five per cent.
Mr. Nicholas said he was hopeful that the amount projected would be achieved and divulged that the target for January was successfully met. “I am hopeful that for February and March we will continue on this trend and reduce the deficit,” the Director General said, while addressing this week’s meeting of the JIS Think Tank session.
He admitted that the goal of $132 billion was “a challenging target”, and added that if it was not met, then the Tax Department would be aiming as close as possible to that amount.
The increase in collection, the Director General said was due to “a host of things” including the tax package outlined by Finance and Planning Minister, Dr. Omar Davies in his budget presentation last year; inflation and the Customs Modernisation Programme. He said an improvement in the operation at Jamaica Customs had seen significant increases in the amount of revenues collected through import duty.
Mr. Nicholas said that he expected more revenues to be collected at the ports following the recent acquisition of x-ray equipment by the Port Authority. He explained that the equipment, though purchased primarily for security reasons, would help in determining more accurately the content of persons’ cargo, thereby allowing for a more accurate assessment of an importer’s tax obligation.
Outlining the other factors that contributed to the increase in collection, Mr. Nicholas mentioned measures introduced by the Tax Department to widen the tax base and increase compliance.
He pointed out that the measures included ascertaining as much information as possible from various sources on persons who are operating businesses.
“One of the greatest sources of information for the Tax Department is the Taxpayer Registration Number (TRN). We have over one million persons on that system, which includes individuals, companies and self-employed persons”.
Mr. Nicholas pointed out that the TRN was used to track persons as they conduct businesses with the various Revenue Departments.
“People import goods at Customs. Lots of people who are not the regular type business persons get involved in the importation of goods and they need to have a TRN and sometime a Tax Compliant Certificate (TCC) and so the information that we have at Customs, which is computerised is used to lead us to new taxpayers,” he explained.
Additionally, Mr Nicholas said that tax auditors who audit the books of large taxpayers, such as supermarket operators, would make a note of the suppliers with whom some of these organisations transact business. “They (auditors) may see that an operator may buy from someone who purchased foodstuff from a farmer to sell and would make a note of these persons in order to check if they are on the tax system,” he explained.
Mr. Nicholas added that the Tax Department also monitored persons receiving contracts, in particular government contracts, to check whether or not they were paying their taxes. The Department also go through the yellow pages of the telephone book to see if the persons who advertise their business operations are tax compliant.
The Director General said that with these measures, Compliance Officers at the Inland Revenue Department had been able to identify new taxpayers each month and as a result “thousands of persons have been put on the tax system”.
“If you can widen the tax base, and bring some people who are not in the tax system onto the system and get them to file voluntarily, without spending a lot of money you could automatically increase the taxes, so that persons in the system who are bearing the brunt of the tax in this country wouldn’t have to be called upon to pay additional taxes,” he said.