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Ministry of Finance and the Public Service Fiscal Policy Paper 2017 63 | P a g e

Both Domestic and External Interest costs, as a percent of GDP, are expected to fall from 3.3% and 4.0% of GDP in FY 2017/18 to 2.5% and 2.9% of GDP, respectively, in FY 2020/21.

Revenue and Grants

Revenue and Grants for FY 2017/18 are passively forecast at $526,345.4mn, or 27.9% of GDP, compared to the projected outturn of 28.2% of GDP for FY 2016/17. The forecast for FY 2017/18 represents a 5.7% increase over the projected outturn for FY 2016/17, which is slightly below the average annual increase of 7.6% over the last 3 fiscal years.

Tax Revenue is budgeted at $478,930.6mn (25.4% of GDP) and is expected to account for 91.0% of total Revenue and Grants, compared to 91.3% of the projected outturn for FY 2016/17. This forecast for Tax Revenue represents an increase of 6.0% ($27,217.8) over projected collections in FY 2016/17 (Table 3M). Tax revenue receipts in FY 2016/17 are projected to increase by 9.7% over the previous year. The budgeted increase in Tax Revenue is predicated on; inter alia, a projected 7.2% growth in nominal income in FY 2017/18, movements in other economic variables, as well as enhanced compliance activities by TAJ and JCA.

Table 3M: FY 2017/18 Revenue Forecast

Source: MoFPS

Contributing to the lower tax revenue growth in FY 2017/18, compared to the previous fiscal year, is the structure of some of the tax types, such as the specific SCT, which is comprised of fixed rates (not ad valorem) and accordingly will not grow in line with nominal GDP. Ceteris paribus, these taxes will therefore show a declining ratio in proportion to GDP, over time.

 Non-tax Revenue for FY 2017/18 is projected at $40,703.6mn, an increase of 17.5% from the projected outturn for FY 2016/17. This forecast amounts to 2.2% of GDP, up from the projected 2.0% of GDP in 2016/17. The projected increase is primarily due to enhanced distributions from the Self-Financing Public Bodies and Executive Agencies as well the de-earmarking of revenue flows to three Public Bodies.

The projected Non-tax Revenue for FY 2017/18 includes:

2016/17 2017/18 % Change

Revenue & Grants 494,801.6 526,345.4 6.4% Tax Revenue 451,712.8 478,930.6 6.0% Non-tax Revenue 34,633.0 40,703.6 17.5% Bauxite Levy 2,121.6 131.0 -93.8% Capital Revenue 521.8 2,228.1 327.0% Grants 5,812.3 4,352.1 -25.1%

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Ministry of Finance and the Public Service Fiscal Policy Paper 2017 73 | P a g e

 Undertaking of training sessions and workshops for Budget analysts, Budget Officers and Corporate Planners to enhance staff capacity to implement the change management programme being undertaken across the Ministry of Finance and the Public Service.

 Full implementation of new revenue administration systems at both the TAJ (RAiS) and JCA (ASYCUDA):

Enforcement and taxpayer services were strengthened, particularly in regard to improved physical accommodation, introduction of third party payment options and other online services;

Introduction of an Electronic Content Management System (ECMS) thereby allowing for the digitization of records of the JCA, the Accountant General’s Department (AGD) and the TAJ;

 Strengthening and modernization of the physical ICT infrastructure through upgrading and replacing IT equipment where necessary for the AGD, the Financial Systems Unit of the MFPS as well as the JCA.

 Launch of an e-tendering system. To enhance transparency, a procurement page was introduced in public media to provide procurement opportunities to potential suppliers.

 Establishment of a training lab at MIND to facilitate training in key PFM areas including the new Chart of Accounts (CoA), as well as the new Commitment and Purchase Order Modules.

 Establishment of the Revenue Appeals Division (RAD) with an organizational structure, business processes and automation (now integrated as part of the RAiS system).

Continued strengthening of the budget planning, preparation and execution capacity through:

(i) A new budget management system was procured and configured and is expected to be utilized during FY 2017/18.

(ii) Phase II of implementation of the Medium Term Results Based Budgeting (MTRBB) was completed in the December 2016 quarter. The consulting firm that was contracted to undertake the assignment has completed its deliverables and the contract is now 90% executed. The main outcomes of this phase are: a) Readiness assessment reports of the MDAs that are to be targeted during this phase

of the implementation; b) Selection of the Ministry of Education, Youth and Information; Ministry of

Industry, Commerce, Agriculture and Fisheries; Passport Immigration, and Citizenship Agency; and the JCA as the main MDAs for inclusion in the MTRBB process;

c) Selection of Officers for the “Training of Trainers” methodology that is to be used for the capacity Development elements;

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Going forward the initiatives outlined below will continue:

• Implementation of TAJ’s National Compliance Plan (NCP) for 2016/17, including the

refinement of key performance indicators (KPIs) to facilitate the preparation of quarterly

matrices indicating targets versus results for each KPI in the NCP.

• Staffing of the TAJ under its new classification as a Semi-Autonomous Revenue

Authority (SARA) is expected to be completed by end-November 2016. Strengthening of

the institution’s capacity will continue with the training of Audit managers which is

expected to commence in November 2016;

• Efforts to increase the filing rate of large taxpayers to 99% will continue alongside the

completion of approximately 70 comprehensive audits of large taxpayers by March 2017.

• With respect to medium size taxpayers, TAJ will be increasing efforts to improve the e-

filing rates for the major tax types of GCT, PAYE and CIT. In 2018/19 small taxpayers

will be required to commence e-filing.

• Drafting of legislation under Phase III of amendments to the Customs Act is expected to

be completed by end-December 2016 with tabling in Parliament by the end of

FY 2016/17. The amendments aim to support enhanced trade facilitation by the Jamaica

Customs Agency (JCA).

• Subsequent to an entity-by-entity review of all grandfathered tax incentives, a Fiscal

Impact Report is expected by September 2016.

• The Special Economic Zone Act promulgated in February 2016 with an Appointed Day

Notice of August 1, 2016 facilitated the appointment of the members of the Oversight

Board Authority of the Special Economic Zone (SEZ). Going forward the following

actions are expected to occur;

(i) The hiring of the Authority’s management team is expected to begin in

October 2016; and

(ii) Drafting of the regulations, to facilitate implementation of the Act is

expected to be completed by October 31st 2016.

The GOJ will continue to implement tax and customs automation operations.

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161

13 SUPPORTING TABLES

The Chart of Accounts in order to provide complete information shall be supported by various

tables (i.e. side tables) in the databases of the FinMan and other systems.

13.1 Side Tables

Some of the main Side tables are as follows:

 TAJ’s Taxpayer Registration Number File

 FinMan Client database of Bank Accounts

 FinMan Register of Government Bank Accounts ( Financial Asset)

 Government Database of Non-Financial Assets ( NB. Software to be procured)

 Publlic Debt –CSDRMS

 Location Code FinMan Database

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Ministry of Finance and the Public Service Fiscal Policy Paper 2017 85 | P a g e

Appendix V

TAX ADMINISTRATION PROGRAMME

Tax Administration Jamaica

TAJ operates as the country’s premiere revenue collecting authority and is responsible for collecting approximately 60% of total tax revenues. In keeping with the Tax Management Programme and its mission to collect the revenues due in an equitable and efficient manner and to foster voluntary compliance, TAJ contributes to a competitive business environment that facilitates and enhances economic growth and development. In accordance with its strategic objectives, TAJ continues to make it easier for persons to do business while reducing the cost of compliance, and has provided additional options for taxpayers to access information, file returns and pay their taxes. As a result, compliance rates and collections continue to improve.

FY2016/2017 PERFORMANCE

During FY 2016/2017, TAJ remained focused on its two strategic objectives: (1) Improving voluntary compliance and (2) Modernization of TAJ. The outlook for TAJ’s core performance is positive as its risk-based compliance initiatives continue to drive its major programmes. TAJ’s modernization programme is a significant contributor to its success. The modernization of TAJ’s human resources, processes, physical infrastructure and systems has enabled it to broaden its reach and grow compliance across the population, and to efficiently and effectively respond to changes in the dynamic operating environment.

Revenue Administration Information System (RAiS)

Implementation of the Revenue Administration Information System (RAiS) signalled a change in the way TAJ does business. This change is manifested in a substantial transformation of the human and technological infrastructure, as well as improved and re-engineered business processes, which has enhanced TAJ’s customer-centric focus and improved efficiency. The TAJ has made major strategic investments in customer service, and taxpayers are benefitting from online services with greater convenience and security.

The implementation of the RAiS has up-skilled over 1,000 team members in addition to upgrading computer systems island-wide. The advanced technological infrastructure has enabled TAJ to strengthen its efficiency and transparency, which are key elements of its National Compliance Plan.

Service and Education

The implementation of RAiS has encouraged and driven customers to use TAJ’s eServices. As a result, outreach programmes focused on strengthening stakeholder engagements. TAJ provided

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