Andrew Green, Staff Reporter
MASSIVE fraud at the Land Titles Division of the National Land Agency (NLA) which may have cost billions of dollars in lost tax revenues is outlined in a report now before the Cabinet, Government sources say.
The Sunday Gleaner understands that the cases include not only individual properties, but also entire housing schemes where the appropriate duties have not been paid.
It is this report by international consultants KPMG, which has pushed Prime Minister P. J. Patterson to announce that the Fraud Squad and revenue authorities have been called in to investigate the operations of the division, still commonly known as the Titles Office, the sources say. The KPMG consultants had originally been brought in to devise systems to tackle the long-standing problems at the Titles Division.
"The losses could run into billions," one informed Government source told The Sunday Gleaner on condition of anonymity. "It is a massive problem."
Horace Dalley, Minister of Land and Environment, will make a presentation in Parliament on Tuesday regarding the probe of the Titles Office.
"The widespread evasion of taxes and duties is one of the major areas of concern," Prime Minister Patterson said in his statement on Thursday. "A number of specific cases have been identified."
With a staff of about 400, the NLA headed by Chief Executive Officer Elizabeth Stair, is divided into six divisions. Changes in staffing and systems there, since it gained executive agency status in April last year, helped clear up some of the more widely known problems, the Government sources said. But the KPMG report, which was called for as part of the reform process, points to corruption at a level few had imagined.
As a result of the irregularities, one housing developer, "is now on the run", the sources say.
"There have been severe problems with the speed which the Titles Office delivers its services," one lawyer told The Sunday Gleaner on condition of anonymity. "The slowness and inefficiencies of the system lends itself to corruption because people cut corners to get their things done and one thing leads to another."
Director of Tax Administration, Clive Nicholas said in a presentation in Chile last August that the most far-reaching and costly type of white-collar crime that takes place in Jamaica today is tax evasion which is practised by persons from all classes of society. He said that because it is not generally regarded as a crime and it is the higher income persons that benefit most from this activity, the tendency is to treat most cases of tax evasion as purely a civil matter so it is not taken seriously.
At the Titles Division, that perception of risk was minimal in the past when it would not have been abnormal for a legitimate transaction to be speeded along by a well placed payment.
The problem is that the "accepted" practice of showing financial appreciation for someone who pushes along a title search had escalated to the point where, documents were being created or falsified for a fee.
Another problem is the undervaluation of property being transacted in order to minimise the 7.5 per cent Transfer Tax, 5.5 per cent Stamp Duty and 0.05 per cent Registration Fee which is charged on the value of the property.
