Put burden of proof on tax cheats

Curtis Webley, Guest Columnist

Much has been said about Jamaica's tax system, and many have tried and failed to implement a model that is fair and equitable.

Finance ministers from both political parties have failed to capture and prosecute high-profile taxpayers who either have evaded the tax system or have underpaid their income tax liabilities. Consequently, much-needed revenues have to be borne by the underpaid, the marginalised, and the already burdened Jamaican citizens.

Although the current income tax system has undergone a facelift to increase its revenue collection and compliance, many view our framework as inadequate, a token gesture, and a revenue stream for the very ones who evade the system. In fact, many people make a mockery of our tax laws because they are skewed towards the poor, and the commissioner's inability to enforce the laws.

Our PAYE tax system is an easy accommodation for politicians who need a quick source of revenue. No one is willing to devise a tax plan that is all-inclusive and provides financial longevity and stability for the country.

The perception of some of our citizens, both abroad and in Jamaica, is that our laws are instituted to prosecute only the poor. Therefore, an attitude of entitlement prevails among the wealthy and prosecution of tax evaders is virtually non-existent, because the few court cases will not be resolved until some of the major players turn up dead, immigrate, or are reported missing.

Our country's fiscal policies dictate that tax laws compliance protocols must be adhere to, and tax evaders punished. How else will the Government get the much-needed revenue to further its economic agenda for the benefit of the country?

However, the lack of enforcement, and the Government's inability to incarcerate perpetrators, lead me to believe that the emphasis may have been on ingratiation and a quid pro quo relationship. What else could be the case?

For example, a couple of years ago the media reported that $24 million was seized from Donald 'Zeeks' Phipps during a police operation in Jamaica. During the JLP's reign, Mr Phipps stopped his application to get his money back from the Government. However, once the PNP Government returned to power, Mr Phipps renewed his application for refund, and Attorney General Patrick Atkinson stated, "There was no legal basis for the State to hang on to the money." (Gleaner, February 24, 2013)

Thus the burden of proof shifted from the defendant to the Government, and the income tax laws immediately became irrelevant. Did Mr Phipps surmise that political favours would be granted based on his loyalty to the party?

I refuse to believe that a group of 21 senators and 63 members of the House of Representatives cannot come to one accord and devise a plan to narrow the great tax divide for the benefit of all people, unless they are paranoid that they might become victims of their own doings.

As I look at the composition of our revenue sources, and try to demystify the problems, it becomes clear that the major culprits of tax evaders are those who are involved in corruption, money laundering, underinvoicing, the informal economy, and a few other areas.

How can a country with so many educated individuals be unable to develop a tax system that is all-inclusive and corral the tax evaders for its own benefit? Is it by design?

We need to become proactive and vigilant if our country is going to collect its revenue from tax evaders. This, I believe, should start with the amendment and implementation of the Income Tax Acts, which highlighted areas for abuse and inequities.

Eliminate the slap-on-the-wrist phrase, "He shall be guilty of an offence and liable on summary conviction to a fine or to imprisonment." Tax evasion should be a criminal offence that is punishable by fines AND imprisonment, not one or the other.

Let the burden of proof be on the criminals to substantiate income, not on the Government. Then we will be in a position to not only collect the billions of US dollars that escape our system, but imprison tax evaders without reservation.

Email feedback to columns@gleanerjm.com and cwebley@wascpafirm.com.