Dionne Rose, Business Reporter

Mayor of Kingston Desmond McKenzie in discussion with acting commissioner of Inland Revenue Viralee Latibeaudiere. - File

A partnership between the Kingston council and the tax authorities have reaped billions in new revenue for the KSAC in the past four months, but Mayor of Kingston Desmond McKenzie believes its the overt threats and parading tax collectors that made the difference.

Less than a year ago, the McKenzie-led Kingston and St Andrew Corporation (KSAC) turned to the Inland Revenue Department (IRD) with a plan to go after tax evaders in the capital.

Council's coffers

Today, the council's coffers are flush with new cash, and counting, under the partnership that emerged.

Last year, KSAC took in $3.5 billion in trade fees.

But in the last four months alone, collections have hit $15.5 billion - a four-fold growth.

Before the KSAC/IRD partnership, it was largely left to businesses to do the right thing. That involved showing up at Inland Revenue offices and paying the trade fee.

The agency would collect and pay over the funds to the KSAC. The arrangement is replicated in municipalities throughout Jamaica.

The fee is payable by all businesses - companies and shopkeepers or sole proprietors - but McKenzie, who is also chairman of the KSAC, tells Wednesday Business that traders earning less than $10,000 per week or $500,000 per annum, are not pressed to pay - at least not in Kingston/St Andrew.

But another 20,000 or so businesses in the Corporate Area are, he said. Few of them do.

McKenzie approached Inland Revenue with his concern and a plan - having the council knock on doors.

Areas to target

All he needed was information on the zones of non-compliance, areas to target and borrowed personnel from the revenue department.

The drive began in May with a street survey by the IRD of businesses in all the commercial districts in and around Kingston and St Andrew.

Armed with the information, McKenzie's team set to work.

Last week, Viralee Latibeaudiere, acting commissioner of Inland Revenue, speaking at a luncheon meeting of the Lion's Club of Kingston, trumpeted the strategy and its success.

"For the entire year last year, we collected $3.5 billion approximately and within these few months, we are already at $15.5 billion," said Latibeaudiere.

The compliance rate on the payment of such fees is generally low islandwide, she said, at 10 per cent.

"But this programme has done very well, we are now at 70 per cent in Kingston and St Andrew."

Improving collection

Now the tax agency is looking to replicate the partnership elsewhere.

"We will be leaving Kingston and St Andrew to go to Portmore and Port Maria during September to ensure that they do improve their collection," said the tax commissioner.

McKenzie has a clear idea of why the strategy worked - threats and fear of the taxman.

"It is the fact that we went out there threatening persons. People saw us on TV pulling down shutters ... on some establishments and we read the riot act to people," the mayor said.

The physical presence of the revenue team also changed the dynamics, he acknowledged.

"Normally, they never had the team to go there and we have supplemented that; and they are out on the road," said McKenzie.

Failure to pay trade fees can result in the authorities seizing goods or locking down the business.

Leighton Beckles, public relations manager at the IRD told Wednesday Business that the fee drive was the first for the department, but would not be its last.

Both the IRD and KSAC, he said, "came together, had a couple meetings and thought that we could help each other with this kind of process. So, the IRD and the KSAC really joined force," he said.

The partnership was forged on the invitation of the KSAC, said Beckles.

Underscoring government

"It is not a case of us going out and doing work for the KSAC or them doing work for us. It is a matter of us coming together and doing something and underscoring this joined-up government."

Beckles said under the partnership, the IRD collected trade licences fees on behalf of the KSAC. He said to get the project going there was exchange of personnel on both sides.

Meanwhile, Latibeaudiere said the venture would be also extended to other parish councils.

dionne.rose@gleanerjm.com

'It is not a case of us going out and doing work for the KSAC or them doing work for us. It is a matter of us coming together and doing something and underscoring this joined-up government.'