THE tax department collected $3.4 billion in taxes through its online channel last year, 47 per cent or $1.6 billion more than it collected in 2009, and more than 1,000 times more than the $582,000 collected seven years ago.

Meris Haughton, director, communications Tax Administration Services Department (TASD) told Sunday Finance that the efforts at expanding the Tax Department’s e-services will continue to generate improved collections over the course of the calendar year 2011.

“For 2011, I expect there to be an increase in collection over the calendar year 2010,” Haughton said. In fact, so effective is the online channel that within one and a half months between January 1 and February 14 this year, the tax department has already collected $515 million. The process has been enhanced significantly by the introduction in January of the single Employer’s Monthly Statutory Remittance Payroll Deductions S01 form.

The single two-page document allows employers to now declare all monthly payroll deductions for Income Tax (PAYE); NIS; NHT; HEART and Education Tax, using one form, making one payment in one place.

Haughton said businesses have responded favourably to the more convenient method of making tax payments.

“As expected, we have been getting tremendous positive feedback from employers and business persons and members of the Institute of Chartered Accountants of Jamaica (ICAJ), as this has certainly enhanced the ease of doing business. It means less paperwork, less time, less cost,” she said.

The benefits of the singular form, which replaces five other documents and a separate method of payment was highlighted by Haughton.

“As indicated, this form will be used by employers to declare and make monthly payments of payroll deductions, promoting the “ease of doing business”. It actually replaces five payment vouchers, therefore shortening the time to prepare documents. It also provides that employers paying by cheque can simply draw one cheque monthly, instead of multiple cheques. The new procedure also allows all statutory payments to be made through the Tax Office. This means that employers no longer have to go to a separate location to pay NHT payroll remittance,” Haughton explained. The payments can also be made by credit or debit card islandwide or online at www.jamaicatax.gov.jm.

Haughton said so far the response from business operators has been encouraging. Entrepreneur Yaneek Page described the form as a “gamechanger for businesses”.

“It saves time, money, and stress,” she said.

The move will not only improve tax collection, as Haughton has projected, but will improve Jamaica’s ranking on the World Economic Forum’s Ease of Doing Business and Paying Taxes Indices.

The Paying Taxes Survey, which is a part of the Doing Business Report 2010, ranked Jamaica at 174 out of 183 countries for ease of paying taxes. In the Report, the WEF outlined international standards that would bring countries up to the level of easy tax administration. “Worldwide, economies that make paying taxes easy tend to focus on lower tax rates accompanied by wider tax bases, simpler and more efficient tax administration and one tax per tax base. They also tend to provide electronic filing and payment systems, which reduce the tax burden for firms while lightening their administrative requirements,” the report outlined.

Haughton, outlined a number of key tax reforms that began in 2010 and which should continue through 2012, that should improve tax compliance and raise Jamaica’s ranking on the Paying Taxes index.

In addition to the increase in online channels and the simplification of the tax form, the Tax Department has also reduced the number of tax payments per year from 72 in 2010, to 36 this year. The number of hours necessary to pay taxes per year has also been reduced from 414 to 199, while the total tax rate has declined from 50.1 per cent in 2010 to 48.4 per cent in 2011.

Haughton said the total tax rate declined as a result of the reduction in transfer tax, which declined more than the one per cent increase in General Consumption Tax (GCT) last year.

“Definitely we are going to get an improved rating,” said Haughton. “By virtue of the single Employer’s Monthly Statutory Remittance — Payroll Deductions S01 form that alone has improved the ease of doing business,” she said. Haughton also pointed to the decrease in the number of taxes and the total tax rate as indicators that Jamaica is looking at an improved ranking for the 2010/2011 Report.

Other reform measures have also been completed or are underway that should further improve the tax collection and administration process. The e-services portal of the tax department now facilitates the issuing of valid Tax Compliance Certificates (TCC), as well as a tax reminder service. And by April 1 this year, the Taxpayer Audit and Assessment Department, Internal Revenue Department and the TASD will be consolidated into a single entity called ‘Tax Administration Jamaica’. Haughton said the process to include the transition of the different processes and employee realignment should be completed by the FY2012.