Tax torture - JAMAICAOBSERVER.COM

Saturday, November 07, 2009 11:07 PM

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Tax torture

USAID official laments difficulty paying taxes in Jamaica

BY TANEISHA LEWIS Observer staff reporter lewist@jamaicaobserver.com

Friday, January 23, 2009

A United States Agency for International Development (USAID) official yesterday described Jamaica as one of the most difficult places in the world to pay taxes and suggested that the Government reduce bureaucracy in order to improve compliance.

Hillard. Jamaica is ranked one of the most difficult places to pay taxes

According to Karen Hillard, USAID mission director, increased tax revenue would put the Government in a better position to repay its debt and provide Jamaicans with public services that they need and deserve.

"Tax compliance here is quite low," Hillard said in an address to the weekly meeting of the Rotary Club of Kingston at the Jamaica Pegasus Hotel in Kingston. "It reaches about 30 per cent. The issue is that complicated tax systems contribute to reduced tax compliance among businesses as well as among individuals. In fact, this is one of the hardest places in the world to literally pay your taxes and I am talking about the physical and business process of paying your taxes."

Added Hillard: "Jamaica is ranked one of the most difficult places to do that on the earth. If you go through that much, then the incentive to get in there and join the formal sector is not very great, so there is a lot of economic activity in what we call the grey economy here."

Hillard also argued that reducing bureaucracy and improving tax administration can help reduce corruption.

Last September, the Tax Administration Services Department (TASD) warned that it would engage in an aggressive Tax Compliance Programme on November 1, the day after the end of a tax amnesty.

"We will be using all avenues available to us through the law to ensure that persons comply and do what it is they need to do in order to be compliant," said Meris Haughton, the TASD's director of public relations.

The country collected over $4 billion in tax arrears from the amnesty.

Yesterday, Dr Hillard also used her address to commend the Jamaican Government for its decision to re-engage the multilateral lending agencies for assistance ahead of the downturn in the global economy. This move, she said, augurs well for Jamaica receiving assistance to offset the global credit crisis.

"In addition to providing a stimulus package that includes tax cuts and loans to vulnerable sectors, the Jamaican Government has intensified its reform programme," she said.

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