Letter of the Day | Setting records straight – One on One is tax compliant

THE EDITOR, Madam:

Reference is being made to The Gleaner front-page article published on Sunday, September 27, titled ‘Companies get $4b tax write-off – entity with $1.5b debt cleared among 86 to get CIT arrears pardoned since 2018’.

The article mentions One on One Educational Services as one of the 54 companies who have “benefitted from the provision of the law which allows the commissioner of taxes to make recommendations for write-offs to the finance minister”. The article goes on to say, “In the recommendation to the finance minister, Dr Nigel Clarke, the commissioner general of taxes determined that the amounts owed by the companies were uncollectable”. The article also lists the top five reasons why these write-offs were granted:

- The inability of the companies to pay;

- Business closed without any assets;

- Directors cannot be located, were terminally ill or have died;

- Company has gone bankrupt;

- Debts are older than 10 years, and where the cost to collect exceeds the debt.

Having read the article and having witnessed the public discourse which has ensued online and offline, it is evident that persons have formed a negative perception of the listed businesses who have had their taxes written off for one of the reasons noted above. Furthermore, it is logical to suggest, in the absence of the truth, that these perception, whether factual or not, will become the reality of many – our existing and prospective clients, partners, stakeholders who choose to associate themselves with businesses that reflects their core values and beliefs are now looking to us for the facts.

Having benefitted from such write-offs and having first-hand knowledge of the facts relating to our case, we wish to clarify factually misleading aspects of the article, which we hope will highlight some glaring deficiencies in our tax systems which has impacted a number of small businesses.

COLD, HARD FACTS

1. One on One started filing and paying taxes on January 1, 2015.

2. As of May 14, 2016, One on One has a principal tax balance of J$3.8m for PAYE and J$1.1m in Education Tax. For the principal balances, One on One had an interest and penalty balance of approximately J$1.3m based on late filings dating back to June 2015.

3. One on One brought Tax Administration Jamaica’s (TAJ’s) attention to the fact that we owed this amount and sought a payment plan arrangement which would allow us to keep current but also clear any arrears in principal taxes owed. At this time, it was promised by the TAJ that once we adhere to the payment plan, penalties and interest will not be compounded, which is a standard arrangement.

4. Following several months of keeping up with the payment plan, in January 2017, One on One made a lump sum payment of J$2m, with a promise to pay on a payment schedule, provided that the TAJ freezes all interest and penalty charges. This was accepted by the TAJ with the understanding that interest and penalties could be waived only after the principal amount is settled.

5. After months of working to clear the balance and enquiring about the continued compounding of interests and penalties online, the TAJ took us to court for the principal balance outstanding on our taxes. The judge granted our request to continue paying down the principal and asked the TAJ to submit a recommendation for interest and penalties to be waived. It continued to compound despite the court’s recommendation.

6. In December 2018, our request was finally approved after we paid the full total of J$6.5m in principal tax balance. Unfortunately, contrary to previous agreement, the penalties and interest accrued now totalled J$12.5m from the initial J$1.3m.

CONCLUSION

1. One on One has never requested nor have we received any write-off in principal taxes (PAYE, Ed Tax, NHT, HEART, NIS, GCT, CIT, MIT, or any other tax) owed to the Jamaican Government.

2. On January 17, 2018, the Tax Arrears Write-Off Committee recommended that the amount of approximately J$12m, representing interest and penalty only, for tax types be written off.

3. One on One has used the laws to obtain write-off of interest and penalties amounting to J$13m, an amount which compounded from J$1m to J$13m in a little over two years, despite a written payment agreement where it was promised that interests and penalties would have been frozen.

4. One on One has attempted to has this written-off since 2015, finally obtaining approval in January 2018.

Madam Editor, the facts presented herein, as supported by attached documents, have caused grave concerns among our directors, employees, clients and shareholders. We therefore ask The Gleaner to consider taking the necessary actions to better explain the facts, as well as to highlight the glaring inaccuracies/inefficiencies in the TAJ’s online tax system.

We look no further than our own experience at this time. At the time of writing this email, our online tax balance reflects balances owing in taxes (interest and penalties included), even though our request for write-off has been approved, gazetted and published. It’s almost two years since the Gazette/approval.

One on One has remained complaint in taxes (filed and paid) since inception, and commits to doing so going forward.

MICHAEL BERNARD

Board Chairman

RICARDO ALLEN

President and CEO