The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Government has extended the life of its Revenue Enhancement Unit by one year, following a "very successful" 2017 first half when it collected between $120-$150 million.

K P Turnquest, the Deputy Prime Minister, told Tribune Business yesterday that the Minnis administration will assess whether the Unit can deliver further "added value or has reached a plateau" by end-2018.

"It's been very successful," Mr Turnquest said of the Unit's achievements during the first six months of the 2017 calendar year. "We've agreed to extend it for another year, and at that time we'll conduct an assessment whether it will be of added value or has reached a plateau."

He added that the increased focus the Unit has brought to revenue enforcement, coupled with the use of "different collection tools" and risk assessments conducted on taxpayers, had helped to drive its success.

The Revenue Enhancement Unit was created by the former Christie administration in the wake of Hurricane Matthew in late 2016, when it was desperate to collect every outstanding cent of revenue available to it given the Treasury's strained financial position.

The Unit focused on VAT, Business License, Customs duty and real property taxes, targeting higher-risk taxpaying firms and those who had significant discrepancies between payments of different tax types.

Mr Turnquest made some mild criticisms of how the Unit was structured by the former government in his mid-year Budget address, pointing out that it cost more than $1 million per month to run, meaning that monies it was collecting were going straight back out to pay its costs.

Suggesting that it was set up without Cabinet approval, with the expense largely stemming from the hiring of foreign consultants, he added: "The initiative itself makes sense - and it is something the Government is continuing much more economically - but it made no sense to create a revenue enhancement project where a significant quantum of the savings went right back to the cost; costs again for which no Cabinet approval was given, and for which most of the costs went to foreign consultants."

With real property tax collections at the mid-year point of the Budget year amounting to $31.8 million, or just 22.2 per cent of forecast, Mr Turnquest said the Government was placing its hopes in "modernisation" to improve revenue yields in that area.

"We'll continue to ramp up our enforcement exercise," he told Tribune Business. "The whole area is being modernised, so we hope to start seeing some improvements very shortly; IT solutions and bringing in staff to help with the assessment process."

As for the $150 million in identified, unpaid bills left from the Christie administration's $200 million-plus 'overhang', Mr Turnquest said the Government intended to settle "the ones we can justify and can be resolved" before the 2017-2018 fiscal year closes.

"To the extent there are commitments that extend over a couple of years, they will continue to be dealt with in years to come," he added. "This all affects cash flow and our ability to implement the programmes we wish to put forward. We continue to work our way through them. It's not unusual for governments coming in.

"This thing continues to evolve as people discover they're unpaid or they have a commitment that's being unfulfilled. They will raise them, and we'll have to deal with them. People could have bills in their desks."

Mr Turnquest said the Government's proposed debt management framework will help to centralise the liabilities and guarantees issued by all government agencies, enabling it to get a better grip on its debts.

"The financial management reforms will help us to have better reporting from the government agencies and departments," he told Tribune Business.