Ethlyn Norton-Coke
Gareth Manning, Gleaner Writer
TAX SERVICES expert, Ethlyn Norton-Coke does not believe Government will achieve a 20 per cent growth in tax revenue this fiscal year. She says Government should only expect to collect 50 per cent of its target.
Mrs. Norton-Coke was responding to Finance and Planning Minister, Dr. Omar Davies' intention to grow tax revenue through improved arrears collection. He made the announcement during his presentation to the 2006/2007 Budget Debate in the House of Representatives on Thursday.
He said Government would collect more taxes by adopting the carrot approach that should encourage voluntary compliance through public education, adding that the laws would be enforced to compel people to comply.
But Mrs. Norton-Coke says while some of the strategies Government will use to collect more taxes are good, increasing tax revenue by 20 per cent is not likely to happen in the next fiscal year, because people need more time to pay. She said a period of at least two-three years will be needed to collect those taxes.
"I think it is a little bit optimistic. I think he can achieve over a greater period of time," she told The Sunday Gleaner.
She said the special project that Government implemented between November last year and March 2006, to collect $5 billion in taxes, was a soft approach that encouraged people to pay, but more vigour needed to be put into collecting from unregistered companies and collecting general consumption tax (GCT).
"There are lots of people out there who are in business and they are not registered and they are not paying anything at all," she said.
She said those businesses who do not pay GCT should face greater penalties so they would be forced to turn over arrears.
RESPONSIBILITY
"I'm not talking now of penalties between 15 and 30 per cent. I'm talking about responsibility on the directors or on the business person, that the GCT money you only hold in trust for the Government, you should pay over," she said."If you send a few people to prison over the GCT, they understand that it's not their money," she added.
She said there should be stricter monitoring of GCT arrears. She says Government too often waits till millions of dollars are owed before they collect and at this stage it is difficult.
INTERNATIONAL HELP
Mrs. Norton-Coke also says Government will not get much through auditing large firms. During his budget presentation the Finance Minister said tax authorities were receiving international help since April to improve revenue.
"When he talks about targeting large companies, I don't know if he is going to get that much more out of them by auditing, because those are the companies and the international companies that are most compliant," she says.
While declining to speculate how much Government would collect from its new approach, financial analyst Keith Collister says the strategy seems to be working in light of the $5.6 billion it collected in only six months. This was $6 million more than what Government projected.
"The private sector has been advocating for a more carrot and stick approach for some time and what they have decided now is that under the new tax czar this is actually the case and it seems to be working for them," he said.
