Letter of the Day | Tax write-off system is transparent

THE EDITOR, Madam:

The Government of Jamaica’s policy of tax write-offs was overhauled in 2013 as part of the first suite of staff level structural benchmarks agreed with the International Monetary Fund (IMF) under the Extended Fund Facility.

Previously, tax write-offs were at the discretion of the minister and these write-offs were never made public. In addition, there were no written rules that governed the circumstances in which taxpayer arrears could be written off. The new system transferred the power to determine taxpayer accounts that should be written off from the minister to the commissioner general of tax. Furthermore, the regulations approved by Parliament list the specific criteria to be used by the commissioner general to determine a tax arrear uncollectable. The commissioner general has no flexibility outside of these rules and, rightly, the minister has no power to determine a tax arrear uncollectable. The final step requires the minister to publish an order in the Gazette of the determination made by the commissioner general. This publication details the taxpayers and amounts.

This reform and the resulting laws and rules benefited from the technical advice of Jamaica’s international partners who are experts on transparency in governance. “ With (i) an explicit, legislated, rules-based approach, (ii) the exclusion of the minister in the write-off determinations and the devolution of this responsibility to the commissioner general of tax and (iii) the publication of taxpayer name and amounts written-off, the system meets international transparency criteria. “ However, it could be made more transparent. As The Gleaner and others have suggested, the publication ought not to paint all taxpayers with the same brush if circumstances differ substantially. Also, though the Gazette is an official public document, and the “newspaper of record” for the Government, it is not in wide circulation. The publication could therefore be made more accessible.

We will immediately improve the system. Going forward, I will direct that where an order is published in the Gazette on the tax write-off determinations made by the commissioner general, we will upload that issue of the Gazette to the ministry’s website within 30 days of it being printed. We will also examine whether the write-offs can be categorised by the specific criteria in the regulations on which the commissioner general made the write-off determination.

It is in the public interest that this process, which has been in place since 2013, is properly understood and enjoys the confidence of the Jamaican people. I will therefore shed further light on the legislation, the regulations, the rationale, and the related policy matters and the total tax arrears written off since 2013 in a follow-up letter to you.

NIGEL CLARKE

Minister of Finance and the

Public Service