Dionne Rose, Business Reporter

State Minister Robert Mon tague is prepared to take a hard line against taxpayers who do not take advantage of the tax amnesty.

FEWER than half of Jamaicans pay their property taxes, leaving a gap in the financing required for solid-waste management and streetlighting.

Compliance rates for land/ property taxes is a 'low' 44 per cent, representing revenues of just under $1 billion at fiscal year end March 2008, said Calvert Thomas, director of revenue enhancement at the offices of Local Government, which is now a division of the Office of the Prime Minister.

But the collection of arrears boosted property taxes last year to $1.85 billion, well below the $2.2 billion that local government had been eyeing.

Out of actual tax collections, solid waste got allocations of $1.24 billion, but Thomas said it took about twice that amount of funds to fund the agency.

The difference

"The amount spent would have been far in excess of the $1.2 billion," said Thomas. "I think it was about $2.3 billion that was spent. The difference would have come from the Consolidated Fund."

Streetlights also took a heavy toll on government revenues, costing about $1.5 billion, said the ministry official. Property taxes contributed just $27 million of the total.

"That means the majority of the funding for street lighting came from the Consolidated Fund," Thomas said.

For beautification and other projects, $51.3 million was allocated from property taxes. The government is pushing for about 60 per cent compliance this year, with projected earnings of $2.7 billion.

Tax amnesty

The ministry is counting on the six-month tax amnesty to help it reach that target.

Finance Minister Audley Shaw said the amnesty would see waivers of interest and penalties being granted across all tax types, once the principal sum owed is paid in full. If the arrears in principal are paid in full by June 30, 2008, the full interest and penalties will be waived.

Thereafter, the following levels of waiver of penalties and interest will apply:

July 31, 2008	-	80%
August 31, 2008	-	50%
September 30, 2008	-	40%
October 31, 2008	-	20%

The amnesty will end on October 31, 2008.

Minister of State in the Office of the Prime Minister with responsibility for Local Government, Robert Montague, is threatening to take legal action against those who fail to make use of the amnesty or those who fail to meet their tax obligations.

The minister, who was speaking with the government news agency, the Jamaica Information Service, said although the Property Tax Revenue Recovery Unit was doing a good job of collecting from delinquents, the Local Government Department would be stepping up the drive this year by sending out notices and taking legal action against "troublesome delinquents."

dionne.rose@gleanerjm.com