Lynford Simpson, Staff Reporter
THE GOVERNMENT experienced a 15.6 per cent, or $2.55 billion shortfall in projected General Consumption Tax (GCT) revenue for the financial year ended March 31, 2002. The projected amount was $16.3 billion.
Auditor-General Adrian Strachan made the observation in his annual report which was tabled in Parliament this week.
He also found that GCT returns submitted by a company was incorrectly calculated resulting in the tax being short paid by $127,439. The department was advised to collect this amount.
The Auditor-General found that two entities were overpaid refunds of GCT totalling $902, 244 and that a refund voucher requested for audit remained unpresented at the date of the report.
"As a result I was not able to verify the authenticity of a refund of $23,611," Mr. Strachan stated.
And it appears many Jamaican entrepreneurs continue to evade the tax net as, of a sample of 198 businesses, there was no indication that 31 were registered as taxpayers. The Auditor-General has recommended that steps be taken to ensure they are enrolled to have them meet their statutory obligations.
According to Mr. Strachan, his audit of the Taxpayer Audit and Assessment Department (TAAD) "disclosed several unsatisfactory features".
For the period under review, the department's bank account was overdrawn $35.73 million. This is in contravention of section 6.3 of the Financial Instructions. As a result, interest and service charges amounting to $80,635 were incurred.
Also at the TAAD, the Auditor-General found that of a sample of 100 taxpayers' files requested for inspection, 43 had not been presented up to the date of his report.
He said the files examined showed "numerous instances in which returns were not made in accordance with the Income Tax Act, but instead remained outstanding for periods of up to six years".
"In other cases although returns were filed and assessments made, substantial sums remained unpaid," the report said.
The Auditor-General pointed out that of 100 taxpayers who received refunds for the period January to December 2001, seven were not received by him up to the time the report was being put together. As such, he said he was "unable to verify if these were in order".
Of the cases examined, three instances of overpayment totalling $59,526 were noted. The TAAD was also found wanting as it was revealed that reconciliation of documents stamped, and the related cash collected, was not always done.
Mr. Strachan warned that "failure to properly effect such reconciliations could result in errors and irregularities going undetected."
