'Erroneous' taxpayer tracking system faces overhaul

Accountants have charged that the computerised system established by the Revenue Department 10 years ago to electronically track the activities of taxpayers is riddled with erroneous information and has been churning out statements of outstanding balances which are incorrect.

As a result, a project has been established to clean up the Integrated Computerised Tax Administration System (ICTAS), which include deleting all penalties and interest applicable up to year of assessment 2002, according to Ethlyn Norton-Coke, chair of the Taxation Committee of the Institute of Chartered Accountants of Jamaica (ICAJ).

At its inception, the tax authorities said ICTAS was designed to effectively track those who have filed their returns on time and automatically generate compliance notices for delinquents who have failed to file.

Described in the past by Norton-Coke herself as "a horrible system" which "has your whole life story", it was also expected to encourage greater tax compliance under penalty of fines up to J$1 million, or jail time with or without hard labour.

The system combines three separate databases - general consumption tax, income tax, and statutory deductions - and also links into other stand-alone systems such as Customs.

But now, Tax Administration Jamaica, the new designation since May 1 for three amalgamated revenue departments which has been created to encourage better tax compliance, now plans to put in place a new computer system - within the next two years - but will require a loan to purchase the hardware and software, Norton-Coke told a taxation seminar organised by the ICAJ at the Jamaica Conference Centre, in Kingston, on Wednesday.

The ICAJ, she said, was vigorously pursuing the cleaning up of ICTAS "because it should have been done years ago, because a lot of the information on the system is incorrect."

One contentious issue raised at the seminar is that ICTAS continues to generate statements of outstanding tax balances, which the revenue department then sends to taxpayers advising them to come in and rectify the situation.

But some of the seminar participants noted that despite repeated attempts to get Tax Administration to correct the information, incorrect statements were still being sent out.

"I am tired of contacting the department to say the statements sent to me are incorrect," said Prunella Vassell, member of the ICAJ Taxation Committee, "so I will just wait for the notice to go to court and I will explain everything to the judge."

Rosalie Brown, the newly appointed Deputy Commissioner General - Operations, at the merged Tax Administration Jamaica agency, assured the seminar that "there is now an active project in place to address the errors on ICTAS. We are working on getting all the errors cleared up."

Vassell said a number of other problems encountered were with the Inland Revenue Department, including errors on receipts regarding tax type and the amount of tax being recorded, blatant disregard by the Revenue Department's cashiers of written instructions on the allocation of payments, and getting the agency to permanently correct its errors.

Among other things, she suggested that in order to deal with the problems taxpayers "ensure that, as far as possible, receipts (obtained from the Revenue Department on payment of taxes) are carefully examined and scrutinised to verify that the information recorded therein is correct."

Tax Administration Jamaica was formed from the merger of Inland Revenue Department, Tax Administration Services and the Tax Administration and Audit Department, and became operational on May 1, 2011.

Norton-Coke said the newly appointed Commissioner General of TAJ, Viralee Latibeaudiere, has indicated that one of the objectives of the organisation is to substantially improve customer service.

In that regard, auditors and compliance officers are to undergo a retraining programme under the theme 'be friendly, but firm'.

"However, they must be willing to work with the taxpayer and the cash flows of businesses, particularly in these hard economic times," Norton-Coke quoted the Commissioner General as saying.

Of the latest amendment to the Revenue Administration Act, which came into effect in 1985 and has been modified many times since, Norton-Coke said, "It's déjà vu but a move forward as we must accept change, and we do hope that the taxpayer will be treated as a customer and client of the TAJ and not as the enemy."

mcpherse.thompson@gleanerjm.com