The Jamaica Customs Agency (JCA) is anticipating revenue of roughly $202 billion, or $8 billion above the target set by the Ministry of Finance for its 2016/2017 financial year.

As the Government becomes increasingly reliant on the agency to increase revenue collections in aiding the recent shift from direct to indirect taxation, head of Customs Agency Major Richard Reese is confident that the internal controls set by the agency, among other factors, will boost the compliance rate of importers.

“Each year our target is moved higher – not only in relation to the exchange rate, inflation and so on, but based on what it is believed that you can achieve. Usually it is pushed a little higher than what is expected of you – but for 2016/17 our target is $194.46 billion, which is $30 billion more than the previous year,” Reese told editors and reporters at the Jamaica Observer’s Monday Exchange.

“The actual projection by Customs is $202 billion. If we are on track, all factors being equal, we could see a surplus of $8 billion or 4.2 per cent,” he continued.

Nonetheless, some importers continue to deprive the Government of much needed revenue by concealing or smuggling goods into the country to avoid declaration of goods as required by the personal allowance limit, according to Reese. The regulation, he said, states that individuals returning home with international purchases exceeding US$50 must pay taxes on the excess goods.

He added that recommendations were tabled to increase the minimum clearance duty from US$50 to US$100 – but without proper controls in place, doubling the limit could have cost the agency near to $87 billion in revenue from fraudulent declarations.

“I was just about to recommend the increase to the Minister when someone grabbed my wrist, and as Commissioner, when someone holds your hand like that you know that something is off. We discovered that shipments were being split. We have people combining the passenger declaration forms and then the goods would have to be shipped in both individuals’ names, so you’re mixing,” the Commissioner said.

“It’s just like two people arriving and there were three suitcases. So we realised that people were using these forms for two shipments.”

He added that importers were also adjusting the figures on the form to allow free passage for some of their goods, in addition to individuals carrying goods on the same flight but registering goods on different airway bills.

“We have seen three turning into five on the forms and these sorts of things, but these people didn’t know that the information is now available at the port. So the minute the person went to the port they were held because we knew that the yellow form had been tampered with,” Reese said.

Similarly, he said, air conditioning units are being shipped in parts in one or two containers but documented on the same bill of lading. “We are not silly, we know that those are complete air conditioning units because they have the evaporator, condenser and so on. And these importers will also do it because they want to be able to compete.

“Someone will say ‘Why don’t you make the parts and the whole-unit duties the same?’ But then we are a part of Caricom – you have to do what the group does. But occasionally the freight forwarder or the manufacturer forgets and everything comes together, not in one container but on the same bill of lading,” he said.

Reese was quick to point out that importers are not breaking the law by splitting up the parts. However, if the goods are shipped on the same vessel it’s a breach of the Customs regulations.

“So what we are now looking at is to see how can we increase the figure, get what is due to Caesar but at the same time have persons benefit. But usually you don’t move that figure until you have the controls, so had I moved the minimum to US$100 on recommendation and the Minister approved it, we would have simply lost maybe another $87 million in revenue,” he said.

For the 2015/16 financial year the Customs Agency produced revenue of $161 billion, $377 million below its target.

However, Reese noted that Customs’ projection of an $8 billion surplus in revenue for the 2016/17 financial year is based on above budgeted performances recorded in the first quarter of the year, with collection variances ranging from 1.67 per cent in April 2016 to a high of 10.3 per cent in May 2016.

He added that for the month of September, Customs expects to exceed its target by 3.67 per cent, having achieved the year-to-date figure of $76.9 billion above target.

“We expect it to be about four per cent above target at the end of the second quarter,” the Commissioner told the

Business Observer.

“What we have in that report is ordinary and extraordinary items. In a year where you might make a three per cent surplus you can look and see if there were any extraordinary items. The extraordinary item for this month is JUTC buses — but that’s only $307 million, so even without those buses we are going to be $1 billion-plus ahead,” Reese pointed out.