WHILE I was in office, an acquaintance of mine complained that he had been served with a “massive” income tax assessment by the tax authorities covering several years. He was furious and fulminated that this was the kind of treatment that discouraged people from investing in Jamaica. He was a successful businessman who lived a pretty ostentatious lifestyle.

Reluctant though I was to intervene in individual tax assessment matters, I asked him to send me a copy of the assessment notice but told him that he should send me, as well, a summary of his tax returns for the years under assessment and I would ask the Ministry of Finance to look into the matter. All I received from him was the tax assessment notice. When I inquired about his tax returns, he reported that his office was badly damaged during Hurricane Dean and all his records were destroyed. Nevertheless, I referred the matter to the Ministry of Finance only to be told shortly after that there was no record of this gentleman ever having filed any tax returns or paid any income taxes.

Tax evasion and non-compliance have plagued Jamaica’s public finances for decades. During his time in office, Prime Minister Edward Seaga introduced the tax compliance certificate as a requirement for conducting a range of transactions. That helped considerably but it didn’t plug all the leaks.

It is not possible to determine the exact amount of revenue lost to evasion and non-compliance. If it were, enforcement would be much simpler. However, it is generally agreed that revenue losses due to evasion and non-compliance run into billions of dollars each year. It places a disproportionate burden on PAYE workers and even pensioners, as they are captive taxpayers with no opportunity for evasion. It burdens the consumers whose General Cosumption Tax (GCT) payments have to be set at a level to help fill the gap. It penalises future generations who will have to repay the money that the Government has to borrow to meet the shortfall between annual revenue and expenditure.

World Bank data indicate that Jamaica’s tax revenues as a percentage of gross domestic product is 27.5 per cent compared to a world average of 15 per cent. Evasion and non-compliance place a greater share of that burden on the lower-income earners.

One cannot help but wonder at the seeming disjuncture between the display of wealth — the abundance of high-end vehicles on the roads, the extent to which expensive houses are snapped up even before construction is completed — and the anaemic movement in the collection of personal income taxes. Between 2001 and 2016 (before a significant increase in the tax-free threshold was introduced) tax collections, after adjusting for inflation, increased by less than one per cent.

The appearance of tax evasion looms in our faces every day — the plethora of shops, many of which are operated by immigrants, that accept only cash and provide no receipts; the professionals who charge huge fees but whose tax payments, if they even make them, are less than those of a mid-level civil servant; the dude decked out in his mesh merino who overtook me on the north-south highway in a convertible Bentley.

Compliance with any requirement is not part of our DNA — just check the motorists exiting Sovereign Centre to turn right on Barbican Road despite two “No right turn” signs that are impossible to avoid seeing.

I attended a conference some years ago in Bonn, Germany, and the itinerary included visits to small business operators. My group visited a small printery and I observed what I was told was a framed tax return hanging on the wall. When I inquired of the operator whether displaying it on the wall was a legal requirement like our GCT registration certificate is, he said no, it was just a demonstration of German pride.

For some reason that I have never fully understood, tax liabilities and compliance are regarded as matters of high confidentiality protected by law. When information is gleaned, it can be very astonishing. A recent investigative report by ProPublica showed that some of America’s wealthiest billionaires paid no federal income tax for several years, albeit through legal loopholes.

Norway and Sweden are different with regard to tax transparency. Every citizen is required to file an annual tax return that is posted on a website to which the public has access. You can look up any name to see what that person’s reported income is and how much taxes he or she has paid. An e-mail notification is sent automatically to the taxpayer identifying the person who did the look-up. Finland is not far behind, the difference there being that one has to visit a tax office to access the database.

If something like that were introduced in Jamaica, the howls and screams would be deafening. There would be dire warnings of capital flight and migration. Norway, Sweden and Finland don’t seem to have experienced any of that.

Bruce Golding served as Jamaica’s eighth prime minister from September 11, 2007 to October 23, 2011.