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Mountain of taxes - Petrojam's unpaid bills reach $4.9 billion - Refinery asking Government to waive $2.61b
IMAGINE A mountain of unpaid taxes so high that, if collected, would be more than sufficient to conduct the day-to-day activities of the Ministry of Justice.
Now, think of a request for a tax waiver, the desired amount being so huge it could nearly run the Ministry of Tourism for one year or take care of recurrent expenses for the Ministry of Youth, Culture and Sports, leaving ample change.
That is the height to which the Petroleum Corporation of Jamaica (Petrojam), the country's oil refinery, has allowed its tax and custom-duty liabilities to climb.
A forensic audit of the company has revealed that it owes approximately $4.9 billion in taxes and duties. At the same time, it has asked that the Ministry of Finance not to collect $2.61 billion of the taxes and duties it owes.
No explanation
Neither Ministry of Finance officials nor Petrojam was willing to explain why the oil refinery was seeking the waiver or whether it would be granted.
The amount being sought as waiver ($2.61 billion) is just under the Ministry of Tourism's allocation in this year's Budget to pay recurrent expenses ($2.77 billion) and far above that which has been given to the Ministry of Youth, Culture and Sports ($2.2 billion) for its housekeeping bills.
The Ministry of Justice was allocated $3.1 billion for its operating expenses.
Operation Vapour, the final report from the forensic audit team headed by Dwight Moore, said Petrojam owed $3.07 billion in taxes and customs fees for the financial year 2008-2009 and $1.65 billion as at May 31, 2009. The report, which has not been released to the public, was obtained by The Gleaner earlier this month.
Last week, Winston Watson, managing director of Petrojam, said he has not seen a copy of Operation Vapour.
"I know an audit was done, but I have not seen the report," Watson told The Gleaner.
He said Petrojam did not withhold taxes from the Government. "Never. We don't," he responded when asked if it was a practice of the company.
"I am not aware that we owe $4.9 billion. I don't know what you are talking about. I don't know how much we owe, " Watson said.
The forensic audit of Petrojam followed a below-budget receipt of the newly announced special consumption tax (SCT) of $8.75 on gasolene and an increase in customs user fees (CUF).
Data from the Ministry of Finance and the Public Service show that revenue from SCT on imported and domestically produced goods, including gasolene, was $2.52 billion ($1.79 billion below projections).
It was at that time that the Public Accountability Inspectorate Division of the ministry was sent in to conduct the forensic audit, which revealed in June that Petrojam had failed to pay nearly $700 million in petrol tax and CUF to the Inland Revenue Department.
Outstanding taxes owed by Petrojam, including liability on SCT for the period April 27 to May 31, 2009, was $938.9 million plus $177.2 million.
Of the amount owing for the period April 27 to May 31, 2009, the SCT component of $8.75 per litre accounted for $522.1 million, plus $177.2 million in taxes for inventory held, resulting in a total of $699.3 million.
The Road Maintenance Fund, which was to benefit from 20 per cent of the $8.75 fuel tax, should have received $139.9 million of the $699.3 million in unpaid taxes.
The report said Petrojam utilised petrol for personal use in three of its vessels and had neither accounted for nor remitted tax in keeping with the GCT Act.
It said that for the 2007-2008 financial year, Petrojam failed to pay over $17.4 million in taxes from petrol it consumed, $13.3 million in the financial year 2008-2009 and $8.2 million between April and May 31 this year.
With the national purse in need of every penny, Operation Vapour has advised the minister that "the Revenue Department should immediately commence collection procedure in respect of the $2.61 billion, while the Ministry of Finance and the Public Service assess the situation regarding the waivable amount of $2.32 billion".
It was unclear, up to yesterday, how much money has been paid over to the Inland Revenue Department by Petrojam since the intervention of Operation Vapour.
daraine.luton@gleanerjm.com
http://www.jamaica-gleaner.com/glean...ead/lead1.html
IMAGINE A mountain of unpaid taxes so high that, if collected, would be more than sufficient to conduct the day-to-day activities of the Ministry of Justice.
Now, think of a request for a tax waiver, the desired amount being so huge it could nearly run the Ministry of Tourism for one year or take care of recurrent expenses for the Ministry of Youth, Culture and Sports, leaving ample change.
That is the height to which the Petroleum Corporation of Jamaica (Petrojam), the country's oil refinery, has allowed its tax and custom-duty liabilities to climb.
A forensic audit of the company has revealed that it owes approximately $4.9 billion in taxes and duties. At the same time, it has asked that the Ministry of Finance not to collect $2.61 billion of the taxes and duties it owes.
No explanation
Neither Ministry of Finance officials nor Petrojam was willing to explain why the oil refinery was seeking the waiver or whether it would be granted.
The amount being sought as waiver ($2.61 billion) is just under the Ministry of Tourism's allocation in this year's Budget to pay recurrent expenses ($2.77 billion) and far above that which has been given to the Ministry of Youth, Culture and Sports ($2.2 billion) for its housekeeping bills.
The Ministry of Justice was allocated $3.1 billion for its operating expenses.
Operation Vapour, the final report from the forensic audit team headed by Dwight Moore, said Petrojam owed $3.07 billion in taxes and customs fees for the financial year 2008-2009 and $1.65 billion as at May 31, 2009. The report, which has not been released to the public, was obtained by The Gleaner earlier this month.
Last week, Winston Watson, managing director of Petrojam, said he has not seen a copy of Operation Vapour.
"I know an audit was done, but I have not seen the report," Watson told The Gleaner.
He said Petrojam did not withhold taxes from the Government. "Never. We don't," he responded when asked if it was a practice of the company.
"I am not aware that we owe $4.9 billion. I don't know what you are talking about. I don't know how much we owe, " Watson said.
The forensic audit of Petrojam followed a below-budget receipt of the newly announced special consumption tax (SCT) of $8.75 on gasolene and an increase in customs user fees (CUF).
Data from the Ministry of Finance and the Public Service show that revenue from SCT on imported and domestically produced goods, including gasolene, was $2.52 billion ($1.79 billion below projections).
It was at that time that the Public Accountability Inspectorate Division of the ministry was sent in to conduct the forensic audit, which revealed in June that Petrojam had failed to pay nearly $700 million in petrol tax and CUF to the Inland Revenue Department.
Outstanding taxes owed by Petrojam, including liability on SCT for the period April 27 to May 31, 2009, was $938.9 million plus $177.2 million.
Of the amount owing for the period April 27 to May 31, 2009, the SCT component of $8.75 per litre accounted for $522.1 million, plus $177.2 million in taxes for inventory held, resulting in a total of $699.3 million.
The Road Maintenance Fund, which was to benefit from 20 per cent of the $8.75 fuel tax, should have received $139.9 million of the $699.3 million in unpaid taxes.
The report said Petrojam utilised petrol for personal use in three of its vessels and had neither accounted for nor remitted tax in keeping with the GCT Act.
It said that for the 2007-2008 financial year, Petrojam failed to pay over $17.4 million in taxes from petrol it consumed, $13.3 million in the financial year 2008-2009 and $8.2 million between April and May 31 this year.
With the national purse in need of every penny, Operation Vapour has advised the minister that "the Revenue Department should immediately commence collection procedure in respect of the $2.61 billion, while the Ministry of Finance and the Public Service assess the situation regarding the waivable amount of $2.32 billion".
It was unclear, up to yesterday, how much money has been paid over to the Inland Revenue Department by Petrojam since the intervention of Operation Vapour.
daraine.luton@gleanerjm.com
http://www.jamaica-gleaner.com/glean...ead/lead1.html
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