Dr Nigel Clarke, the finance minister, has done something we are calling “political honesty”, even if it seems to be an intriguing oxymoron and the timing unlikely.

Last Tuesday, without any apparent provocation, he alerted the nation to the fact that government revenue, specifically corporate tax, had significantly underperformed in March, the end of the 2023/24 fiscal year.

In an election year, Dr Clarke also warned that if the revenue underperformance persisted for a few more months into the new fiscal year it could impact spending that has already been signalled. That, hopefully, all but suggests that there isn’t going to be any ‘run wid it’ spending spree.

One is not necessarily being cynical to have the view that politicians, in general, are frequently dishonest, given the centuries of long, hard experience that have been more than well documented.

However, for Dr Clarke to admit that all is not well cuts against the grain of the slick, Government public relations campaign that has unceasingly assured the country of how the economy has performed beyond anything we have seen. The admission seems to have come out of nowhere.

According to the finance minister, tax revenues fell $28 billion below target, due mostly to corporate income tax being $14 billion lower than Government projections in March alone. Several entities/individuals who filed did not make the indicated tax payments within the required timeline.

He blamed two things — changes to the International Financial Reporting Standards (IFRS) which have resulted in lower taxes being declared by a number of financial institution and the financial sector reporting lower taxes than previous periods.

Even so, it would seem that the Government is not fully convinced of that suggestion, and so Dr Clarke signalled that the “impact of the changes to the accounting standards is being closely examined by Tax Administration Jamaica (TAJ)”.

Moreover, the Government has commenced “an assessment of the options to ensure prudent fiscal operations and the attainment of legislated targets”. Interestingly, with a lot of companies declaring, but yet to file tax payments, “we have to see how successful Tax Administration Jamaica is in chasing those people down”, he declared.

That there is need “to chase down those people” means that something is not right and we expect that Dr Clarke will be reporting to the nation shortly about what TAJ has found, calling names if necessary.

From the visuals, there is a high-rise building going up every day. The more than 69,000 active companies and upwards of 200,000 businesses on the Companies Office of Jamaica register, at last count, need to pay their fair share of taxes.

To achieve this, the Government has to abandon its lethargic approach to collecting taxes and go after the many entities
— small, medium and large
— which have largely been flying under the radar.

It is of note that while corporate tax is below par, the old beating stick of Pay As You Earn (PAYE) personal income tax
— up 25 per cent
— and General Consumption Tax, up 21 per cent, continue to carry the burden… unfairly so.

Now might be an appropriate time to revisit old proposals about direct taxation. The nation would appreciate Dr Clarke’s honest take on this matter.