By Robert Hart, Staff ReporterMASSIVE INCREASES to income tax and customs penalties have been approved in the House of Representatives as Government seeks to create more realistic deterrents to taxdodging and customs offences.
Among the increases to fines related to offences under the Income Tax Act is a $200 to $10,000 jump for failure to deliver a declaration of estimated income tax. Under the Customs Act, there is a $5,000 to $100,000 increase in penalties related to the failure of 'the master of any aircraft or ship' to file a proper report on the goods aboard.
The amendment Bills will now go to the Senate for approval.
NO BREACHING
But during last Tuesday's debate on the two Bills, Opposi-tion Member of Parlia-ment Delroy Chuck called on the Government to ensure that State agencies do not breach the legislation.
"Let the agencies of Govern-ment send the right signal by not holding back statutory deductions," Mr. Chuck said. He was referring to recent revelations in Parliament's Public Accounts Committee (PAC), of which he is a member, that some Government Ministries and agencies have been holding back on the payment of statutory deductions in order to keep up with other required payments, including salaries.
Mr. Chuck added: "When the agencies of Government send the right signal we can then enforce these amendments fully."
Audley Shaw, Opposition spokesman on finance, had earlier knocked the Government for the inefficient operation of the tax administration. "Upping the fines in and of itself is no guarantee that you are going to improve your level of compliance. Of critical importance is the quality of the tax administration at every level of the system," he said.
FINES LITTLE HELP
Suggesting that the current state of tax administration and collection is unsatisfactory, Mr. Shaw noted that an estimated $15 billion of income tax is owed to the Government. Of that amount, an estimated 60 per cent has been deemed uncollectible.
"It is against that background that I believe this honourable House would have an interest in knowing whether the new administrative arrangements that were entered into in recent years have in fact been able to allow for improvement in the efficiency of tax collection," he said.
Mr. Chuck suggested that the increase in fines would do little to help reel in the massive sums of unpaid taxes if the mindset of the taxpayers is left unchanged. "The people of this country must feel almost guilty when they don't pay taxes, and the way to do so is to ensure that the tax dollars are properly spent and the people get value for money," he said.
While closing the debate, Fitz Jackson, Minister of State in the Ministry of Finance and Planning, admitted that the increase in penalties would not be sufficient by itself. "This Bill never made an assumption that those upgraded fines and penalties would by themselves achieve that goal. It represents one other response to the administrative reform of the tax administration system," he said.
Mr. Jackson also suggested that the reform of the tax administration system has 'yielded significant improvements'.
