REAP to probe company books for unpaid taxes
Published:Friday | August 5, 2011 | 12:00 AM
- More scrutiny for cash-only businesses
Tax Administration Jamaica (TAJ) is not saying how much taxes go unremitted by the employers targeted under an aggressive collection programme dubbed REAP, but the amount is counted within the J$20 billion of additional revenue sought under the national compliance programme.
The national programme aims to bring as many as 5,000 new taxpayers into the net by the end of the fiscal year next March.
The Revenue Enhancement & Arrears Project, or REAP, will focus on probing the financial records of companies suspected of tax avoidance and evasion.
The project is "an integral part" of the national programme developed to do "expanded and sustained" audits of PAYE compliance, TAJ said Wednesday.
PAYE refers to personal income tax deducted from salaries at a rate of 25 per cent. Employers are also responsible for deducting and remitting NIS, education tax, NHT and HEART Trust/NTA contributions to the tax authorities.
A newly released finance ministry financial reports show that the Treasury was above target on PAYE collections in the first fiscal quarter. Employers remitted J$13.56 billion of income taxes deducted from payslips over the April to June period, which was J$593 million more than the finance ministry had projected.
The targeted PAYE collections for the full year ending March 2012 is J$55.84 billion.
Comparatively, the corporate income tax payments were off target by J$505 million, at J$5.84 billion for the quarter. Collections for the fiscal year are targeted at J$35 billion, the largest chunk of which is expected to flow to the country's coffers in the month of March 2012.
REAP will go after employers who: fail to remit deductions from employees' salaries; deduct the incorrect amount of payroll taxes; fail to file PAYE returns; or fail to register as taypayers, said TAJ, but it will equally focus on the financial records and business activities of wholesalers and traders tagged for inspection through the tax agency's Forensic Data-mining Intelligence Unit (FDIU).
"Data analysed by the FDIU suggests a high level of non-compliance on the part of persons operating in the cash economy across several sectors, who keep minimum records and accept cash as the only payment method," said TAJ in a statement.
"It has, therefore, been determined that special attention needs to be paid to these sectors."