UPDATE: Tax collections outperforming targets
Published:Tuesday | January 29, 2019 | 1:28 PMAvia Collinder/ Business Reporter
The systems implemented by Tax Administration Jamaica, TAJ, in recent years to assist with tax compliance, are delivering results, according to the revenue agency’s chief communications officer, Meris Haughton.
Tax collections have been outperforming expectations in recent years due, the TAJ said, to initiatives such as the Revenue Administration Information System, RAiS, which now supports online payments, as well as amendments to the tax laws and the agency’s public education drive.
For the current fiscal year, tax revenue collections have exceeded the government’s target by more than $10 billion. The finance ministry had expected to collect $329.85 billion in the first eight months of the current fiscal year, April to November, but hauled in $340.72 billion instead, according to finance ministry data.
That performance tracks with the collections over the past three fiscal years, based on data from TAJ. For the period ending March 2016, collections of $264.4 billion marginally outpaced the target that was set at $263.3 billion; for year ending March 2017, collections of $284.3 billion were $18 billion ahead of the targeted $266.2 billion; and last year, the revenue authorities collected $306.9 billion, which outperformed the projections of $297.7 billion by $9 billion.
The major tax categories include ‘income and profits’, inclusive of PAYE, tax on dividends, tax on interest, and tax on other companies and individuals; ‘production and consumption’, under which falls special consumption taxes, general consumption tax, environmental levies, motor vehicle licences and other licences, accommodation tax, the minimum business tax, education tax, telephone/termination tax, stamp duty and contractors levy; and the most lucrative group ‘international trade’ which incorporates SCT and GCT on imports, customs duties, stamp duty and travel tax.
One of the expected benefits of the National Identification System, NIDS, to be implemented by Jamaica, is an increase in compliance in areas critical to the operation of the State, including tax collection, but while Haughton acknowledged that NIDS could have a positive impact, she said she was not prepared to discuss the issue of NIDS at this time. NIDS is designed to capture and store personal identity information, including biometric data. It will also generate a unique number – a National Identification Number – and a multipurpose card for every Jamaican citizen and person ordinarily resident in Jamaica.
NIDS is also touted as a tool to aid in the development of a digital economy and facilitate connectivity between government services, beneficiaries and agencies. It’s expected to come on stream in September.
Haughton said the utilities now available to the TAJ under RAiS, “which has the capacity to cross-reference other systems” has allowed the agency to identify new taxpayers and broaden the tax net.
“As to the current taxpayers, we have a more accurate means of determining their liability,” she said.
Consequently: “We have been buoyant for the last three years. We have been ahead of target for the last three years, and are now on target to surpass the collections target for 2018-19,” she said, adding that the targets have already been revised upwards.
Haughton said that while NIDS could assist in identifying taxpayers, it was not the system’s primary purpose, leaving it unclear as to how the TAJ would leverage that database in the future.
Tax inflows are already on the rise due to closer monitoring of arrears facilitated by the phase two upgrade of RAiS in August 2017, which facilitates online payments. The TAJ has also pulled more ‘medium’ taxpayers into the net – a group that represents a band of low- and high-income taxpayers, including businesses with annual sales ranging from $150 million to $1 billion, and those with annual tax payments of $30 million to $500 million. They are expected to file GCT returns online monthly.
The TAJ has also been aided by legislation, including access to third-party information and garnishment laws, and there is now a strict application of a system-generated penalty of $5,000 per month for late filing of returns.
CORRECTION: This story and its headline have been adjusted to remove incorrect references on NIDS that were wrongly ascribed to Meris Haughton of the TAJ.