KINGSTON — Minister of Finance and Planning, Hon. Audley Shaw, has urged self employed professionals to become tax compliant and file their annual income tax returns.
Mr. Shaw made the call on Tuesday November 23, 2011 in an address to the Tax Audit and Revenue Administration (TARA) Post Graduate Diploma Programmegraduation exercise, at the Jamaica Pegasus Hotel, New Kingston.
“Come next fiscal year, we are encouraging those in the professional categories who are self employed, regardless of the area, whether it is lawyers or doctors or accountants or surveyors or engineers; whatever the professional category, we are asking you to (file your income tax returns),” he urged.
He stressed that there are many self-employed professionals earning a “pretty good wage”, who leave “the burden of the taxation system,” on the captive PAYE (pay as you earn) employees, making the system inequitable.
“There are a lot of self-employed persons in this country who are just not paying their equitable share of the tax burden. That is why we have made the decision that, like most other civilized countries, we must begin now to honour the system of filing our annual income tax returns,” he insisted.
Mr. Shaw said that self-employed professionals were being targeted as they ought to know better, pointing to an audit of doctors which revealed that of 500 doctors surveyed only 100 had filed income tax returns.
“We believe that that is an accurate representation, certainly in terms of the sampling, of probably what is taking place across the board among all professional categories in the self employed region,” he said.
Turning to plans to address the evasion of taxes at the Customs Department, the Finance and Planning Minister informed that the Government intends to impose an uplift tax for traders, who try to dodge the system.
“We are going to impose an uplift tax at Customs for any company or business operator that has no visible evidence of being a registered GCT (General Consumption Tax) payer, no evidence of filing income tax returns, no evidence of filing corporate taxes returns, but an abundance of evidence of trading in multiple millions of dollars,” he said.
Mr. Shaw pointed out that a computer and information system is now in place to identify individuals and companies who will be required to pay the uplift tax, noting that there are companies which import $50 to $100 million of goods each year, then vanish from the system without paying GCT, or filing income tax or corporate tax returns.
He warned those who intend to avoid paying taxes by changing the company’s name every month or six months, “we have a plan for that too”.
“Unless you establish a track record, then you are going to pay the uplift tax. You can always go and change from one company name to another – that’s not going to help. A new company is going to have to pay the uplift tax,” he cautioned.
“Once you establish that you are a credible operator within the system, you are in the GCT system, you’re filing personal income tax returns, then you will not be subject to the uplift tax after that,” he explained.
Noting the importance of clamping down on traders, the Minister pointed to Government’s plans to reduce the Common External Tariff (CET), and that costs would have to be recovered once this is done.
“There has to be a compensating factor for when we bring the overall border rates down,” Mr. Shaw argued.
He noted that the plan for the discussions on the Tax Reform Green Paper, at this stage, is to cut the CET from 40 per cent to 20 per cent, across the board, and to have other general taxes cut, including GCT.
“But, once these taxes are cut, we are going to elevate and strengthen our compliance programme,” he said.
By Alecia Smith-Edwards, JIS Reporter