Sabrina N. Gordon, Business Reporter

Customers waiting for assistance in the downtown tax collectorate in this 2005 Gleaner photo. The Tax Administration Department has warned investors in high-return schemes that they are liable to income tax and should file returns. - FILE

The revenue authorities will be going after what is likely to be tens of billions of dollars of unpaid income tax, having warned Jamaicans that their returns from proliferating high-yield schemes are subject to tax.

On Monday, the Tax Administration Department (TAD) told Wednesday Business it was in the process of determining the approach to take in going after the unremitted sums.

'The direct approach that will be taken is not yet decided," said Meris Haughton, public relations manager at the Tax Administration Department.

Haughton advised, however, that income earned by persons resident in Jamaica are liable to tax on profits or gains.

This includes interest accruing in or derived from investments in the island or overseas, and whether that gain is paid in Jamaica or not.

TAX ON INCOME

Similarly persons not resident in Jamaica are liable to tax on income arising quick rich schemes in Jamaica.

Thousands of Jamaicans have invested in the schemes, with one of the most popular, Cash Plus Group, saying Tuesday that membership in its club tops 40,000 individuals, whose average principal investment is US$300, vice- president Chris Goulbourne told Wednesday Business.

A senior accountant at Cash Plus said the loan agreement between the company and its club members company does not allow for the subtraction of any fees or taxes, and that it was up to clients to disclose their income and pay the taxes due.

The company pays returns of 10 per cent up to a cap of 18 per cent per month. Rates quoted across the sector have ranged from 6.0 per cent to 25 per cent per month.

"The public is advised that income tax is due on interest earned from monies placed in investment schemes of any kind," said a Tax Administration notice published in weekend papers.

INCOME TAX RETURNS

The department also advised that individuals should file annual income tax returns on or before March 15 "disclosing all income earned, including interest, and pay the taxes due."

It is heavily speculated that the schemes could be worth $150 billion or more, a figure that regulator Financial Services Commission has said it could not verify.

Tax Administration also said it was unable to quantify the taxes outstanding.

The Jamaican Government last year collected $187.6 billion of tax revenues, the largest portion of which was in the form of income taxes, amounting to $80.7 billion.

Income taxes were introduced in Jamaica in 1920.

The Tax Administration Department says the audit exercise it carries out as part of its normal function could provide information to help track down non-compliant taxpayers.

sabrina.gordon@gleanerjm.com