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The Auditor General's Department (AGD) has unearth several shortfalls in the area of property tax collections undertaken by the Tax Administration of Jamaica (TAJ).
The findings were contained in the AGD's performance report of property tax collections and enforcement at TAJ, which was tabled Tuesday afternoon in Parliament.
The audit sought to determine if the Tax Office was managing its property tax operations effectively, and efficiently.
According to the audit, with less emphasis placed on targeting the number of non-compliant properties, the TAJ was ineffective in ensuring a high level of compliance among registered properties.
Of note was that when property tax compliance is considered using the number of properties as a measure, TAJ only achieved 45 per cent of total obligations over the three year review period, FY 2013/2014 to FY 2015/2016.
In particular, the AGD report stated, for 2015/2016, the total obligation was $15.29 billion or 52 per cent of the $7.98 billion budgeted.
TAJ responded that they are recommending that the targets provided to them, be more in keeping with the total obligations versus budgeted collections.
On the positive side, the TAJ achieved an average 90 per cent of property tax collection target. However the audit found that this target is linked to the dollar value of the property tax and does not consider the number of properties.
In the meantime it was revealed that the value of property tax increased by almost three times to $6.5 billion in the period 2015/2016 from $2.5 billion in FY2011/12. This was mainly the result of an increase in property tax rate in April 2013 and not an increase in compliance rate.
Meanwhile, the TAJ has increased its number of collection platforms, collection centres staff capacity and prioritised collection efforts, in parishes with low compliance level and high arrears.
The TAJ said its inability to enforce compliance was constrained by the limited number of court sessions assigned for tax cases, as well as problems related to the disposal of seized assets.
At the same time, the non-existence of titles for some non-exempt properties under various circumstances thwarted the TAJ's efforts to serve notice for payment arrears.
The AGD recommended that the TAJ expedite strategies to improve the accuracy of property tax register, enabling greater efficiency in the use of resources for property tax collection and enforcement.
It added that TAJ performance measure, should also include a target to increase the number of compliant properties, and specific milestones to achieve an optimal level of compliance.
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