Finance Minister to Write Off Uncollectable Tax Arrears

first_imgA Bill to empower Minister of Finance and Planning, Dr. the Hon. Peter Phillips, to write off arrears of taxes as well as penalties determined to be uncollectable, was approved by the Senate on March 21. “Historically, the TAJ’s success is measured by their ability to deliver these targets, as all unpaid arrears are kept in the active inventory of the TAJ and reported to the Ministry of Finance. This large amount of taxes due, probably contribute to an unrealistic collection expectation and the perception of failure,” Mr. Golding said. The Bill was approved by the House of Representatives on March 12. Piloting the Bill, Minister of Justice, Senator the Hon. Mark Golding, said Tax Administration Jamaica (TAJ) sets targets that are established by the Ministry, within the context of budgetary measures. The Minister added that it has not been scientifically established whether the results of these efforts justify the related expenditure.   As of December 2011, there were 70,245 accounts totalling over $230 billion in old debts. Of this $230 billion, approximately $195 billion is over three years old, and only approximately $4 billion is less than six months old, with the remaining amounts between six months and three years. The Bill, titled the Tax Collection Amendment Act, also provides for regulations empowering the Minister to provide a tax debt arrears management system, for the ranking of the debt for the purpose of collectability and the criteria for determining a debt to be uncollectable. He noted that the department’s usual response in any inability to meet what may be an unrealistic target, is to devise special projects or create special teams to rapidly increase collection. CONTACT:  LATONYA LINTON “Whatever the measure of success, these mechanisms do not adequately deal with the root causes of the enormous arrears on which the original target was partially premised. Consequently, the arrears are not cleared and they reappear in the next budget cycle as amounts owed to the revenue,” Mr. Golding said.   In his comments, Opposition Senator, Thomas Tavares Finson, while supporting the legislation, noted that the Bill is important as it is a matter related to the continued negotiations with the International Monetary Fund (IMF).  last_img

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