No TAJ sanctions!

HEAD OF Tax Administration Jamaica (TAJ) Ainsley Powell says there is no plan for any employee to be sanctioned over the situation where the agency has spent almost $400 million for the leasing of two buildings that remain unoccupied.

The TAJ has pointed to Jamaica’s procurement rules, aspects of which are to be reformed based on recent announcements by Finance Minister Dr Nigel Clarke, who is also the responsible minister for the agency.

The revelation of the costs came in an Auditor General’s Department (AuGD) special report that was tabled in the House of Representatives on Tuesday, after being blocked by Speaker Juliet Holness for almost two months because of a disputed interpretation of laws surrounding AuGD reports on public bodies.

It outlined that, up to August 2023, the TAJ spent a total of $371.8 million of taxpayers’ money to lease a property in Mandeville, Manchester, and another in Annotto Bay, St Mary over a three-year period, and failed to occupy the buildings up to August 31, 2023.

“We have not come down to that position,” said Powell, who is the commissioner-general of the TAJ, when asked by The Gleaner yesterday whether there will be any internal enquiry and sanction over the issue which has generated public condemnation.

The TAJ is the nation’s chief tax collection entity.

However, Powell said the TAJ is not happy about the issue.

“No, we’re not, but there were circumstances that led to the delay on those two lease arrangements.”

The TAJ has insisted that it has been following the country’s procurement rules, one of which requires a lease to be in place before any efforts to determine designs and then implement them.

“Once the lease is in place, then TAJ is liable to make payments,” the agency said in a statement yesterday which gave a chronology of the procurement processes associated with the two leases.

“The delay in occupancy is attributed to the lengthy procurement process and build-out required to make the space suitable for the delivery of tax services, which, in the instance of Mandeville, had to be restarted, and both are still ongoing,” it added.

The TAJ leased the property in Greenvale, Mandeville to bring together the tax services currently offered at two locations - South Race Course Road and Caledonia Road. The process started in April 2018 and the lease was signed in September 2020.

A total of $357 million has been spent on the property over the past three years.

The AuGD said the other locations are costing the government $51.2 million per annum.

The TAJ said that, based on the size, two procurement processes are required, one to put in place a consultant and another two for the build-out contractor, which cumulatively “can take up to fourteen months for completion”.

Cabinet’s approval is also required for contractor agreement.

“In addition to the lengthy time frame for the process, the procurement for the building contractor failed ... ,” the TAJ said.

It explained that, last August, the Public Procurement Commission did not endorse the recommended contractor “on the basis that 4 additional contractors in this category were added to the procurement platform after the expression of interest phase but before the date for return of bids”.

The TAJ’s appeal was unsuccessful.

It said a competitive bidding process is being pursued and may take another six months for the engagement of a contractor, which is to be followed by construction which will take “a minimum 12 months to complete … [by] September 2025 at best”.

Regarding the St Mary property, a former bank, the TAJ explained that it was viewed as “an ideal” building to relocate the Annotto Bay tax office, which was deemed to be in need of major repairs.

A lease was signed in December 2021.

It said changes needed to be made and it informed the owner in a letter dated February 10, 2022, requesting that the space be restored to its original state. Designing and other architectural works were approved in April 2023. Renovations work followed.

The TAJ said, based on the timelines, the new tax office should be open for business “within the second quarter of the 2024/2025 fiscal year”, which is between July and September 2024.

In her investigation, the auditor general confirmed allegations that the Annotto Bay property was leased from a company in which the sitting member of parliament is a director.

However, the AuGD said no evidence was presented that suggested that the MP interfered with the TAJ’s procurement process, or influenced the TAJ’s decision to lease the property.

Auditor General Pamela Monroe Ellis said the TAJ did not receive permission from the Commissioner of Lands prior to entering into the lease agreement for the Annotto Bay property.

As at August 2023, the TAJ spent $15 million on that lease.

editorial@gleanerjm.com