Air J stamp duty arrears hit $400m mark

AIR JAMAICA continues to owe the Government millions of dollars in unpaid stamp duty, the Public Accounts Committee of Parliament (PAC) heard Tuesday.

Vinette Keene, Commissioner of the Taxpayer Audit & Assessment Department (TAAD) told the PAC that the national carrier's outstanding payments had now hit the $400 million mark. Responding to the issue which was contained in the Auditor General's report, the TAAD head said talks were taking place to have the money paid up.

"Most of the other airlines have paid up their arrears and the interest associated with them," Mrs. Keene said. "There is still some arrears outstanding from Air Jamaica but the Ministry of Finance and ourselves are working with them to work out the payment schedule."

It was not the first time that the issue of Air Jamaica's outstanding stamp duty had come before the PAC.

At a sitting in 1999, the PAC heard that the national carrier owed more than $341 million for stamp duty it collected on tickets and that it was in talks to see the debt removed as part of a deal with Government. The stamp duty, collected on the purchase of airline tickets, amounted to $293 million plus $48 million in interest accrued dating back to 1994.

At that time Stamp Commissioner Marlene Humphrey told the Committee that Air Jamaica had not paid over the stamp duty it collected since 1994. She added that the airline owed $15 million in stamp duties when majority ownership in the entity was sold by the Government.

The Air Jamaica Acquisition Group led by hotel magnate Gordon 'Butch' Stewart bought a controlling stake in the carrier that year, while the Government retained 25 per cent interest.

Miss Humphrey said when Air Jamaica was being divested, an arrangement was made for the airline to pay off the $15 million debt. She revealed that the airline paid about three instalments and then stopped. "We have tried from time to time to take them to court but so far we have not succeeded in doing so," she said.

Payment of the arrears is likely to put a heavy financial burden on the company, which continues to reel from the dip in air travel, following the September 11 terrorist attacks in the United States. Immediately following the attacks, Air Jamaica reported that it had lost US$11 million.

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