NAME OF FEATURE | THE GLEANER | SUNDAY, JANUARY 29, 2023 24 CUSTOMS WEEK 2023 A PRINCIPAL objective of the Government of Jamaica’s (GOJ) revenue strategy is the reform of the tax systemtoachieve simplicity, efficiency, and equity. The improved tax systemis expected toensure revenueadequacyand to facilitateamore competitive business environment that promotes sustainable economic growthanddevelopment.TheJamaica Customs Agency (JCA) plays a pivotal role intheachievementof this revenue objective. As part of its mandate, the JCAequitablycollects the revenuedue from international trade and travel. As at December 2022, $213b in tax revenues for thecurrent fiscal yearwas generated from international trade and travel. Comparatively, this inflow surpassed theprior year’s tax revenue outturn of $169.3b by $43.7b, or 25.8 per cent. Additionally, thecurrent yearto-date tax revenue exceeded the pre-pandemic outturn of $165.2b by $47.8b, or 29per cent.Historically, yearon-year growth in revenue averaged 11 per cent andwas driven largely by changes in the volume and value of international tradeandaccentuatedby new revenuemeasures, to include an increase in the Special Consumption Tax (SCT) payable on fuel, alcoholic beverages and cigarettes, broadening the General Consumption Tax (GCT) and environmental levy (ENVL) base, as well as increasing the travel tax rate and denominating same in United States dollars, which further solidify theGOJ’s commitment to fiscal consolidation. However, in theabsenceof newrevenue measures, spanning the period FY2018-19 toFY2022-23, thehistorical average growth rate in revenue was five per cent. At this rate, and holding macroeconomic variables constant, the receipts-based revenueprojection model estimated the tax revenue for April to December 2022 at $191.3b – $21.7b, or 11 per cent below the current outturn.TheCOVID-19pandemic and theattendant implications for the cross-bordermovementof peopleand cargo have certainly changed the JCA’s revenue growth trajectory. The revenue statistics revealed a strong recovery in international trade inflows and importantly, demonstrated the resilience of the Jamaican economy. The outturns for all tax revenue items exceeded both the preceding year as well as the pre-pandemic year, with the consumption taxes recording the strongest performance year-on-year. In terms of contribution to the total tax revenue outturn, between 2022 and 2021, the import duty item remained firm at 22 per cent – a one percentage point improvement over 2019, where the registered contributionwas 21 per cent. TheGCT itemmaintained its dominance, accounting for 42 per cent of the total tax revenue for 2022. However, this contribution was two percentage points below the 44 per cent recorded for 2021 and also one percentage point below the 43 per cent recorded for 2019. The change in contributionwas driven largelyby the continued fiscal support providedby the GOJ to productive sectors. Like import duty, the SCT’s contribution remainedunchangedat 24per cent between2021 and2022, but improvedbyone-percentagepoint from the 23 per cent registered for 2019. The travel taxes, which traditionally accounted for 10 per cent of the tax revenues, recovered from a low of three per cent in the height of the COVID-19 pandemic to six per cent in 2021, and stood at nine per cent in 2022; recovery that could be attributed to the reopening of the borders to travellers, as well as the tourism and entertainment sectors. Aggregately, at the macro level, the JCA’s contribution to the total GOJ’s tax revenue remained robust and unchanged at 41 per cent between April to December 2021 and 2022. Prior to the onset of the pandemic, this contribution, over the nine-month period ending December 2019, stood at 40 per cent. Similarly, the ratio of tax revenue from international trade and travel to gross domestic product (GDP), using the available data as at September 2022, remained unchanged at 11 per cent when compared with the first two fiscal quarters of 2019, but improved by two-percentage points, relative to the same period of 2021. Bold reforms, or operational improvements, driven by evidence-based decisions, coupled with strong recovery in economic activities may have contributed to the recovery in international trade revenues. Additionally, the impact of higher commodity prices, unprecedentedgrowth in transportationcost, and changes in key macroeconomic indicators such as inflation, interest rate and exchange rate cannot be discounted. To the credit of the JCA, its revenue assurance mechanisms prevented the avoidance or evasion of $4.07b in revenue over the period April to December 2022. This was 42 per cent more than the previous year and an almost doubling of the additional assessment registered for the same period of 2019. Undoubtedly, the promotion of knowledge-sharing, through continuous training, greater use of data analytics and the digitalisation thrust, have contributed significantly to this achievement. At the commodity level, the strong revenue performance recorded by the JCA was buoyed by the following top 10 categories – mineral fuel; beverages and spirits; motor vehicles and parts, and accessories thereof; ceramic products; machinery and equipment; plastics, and articles thereof; preparations of vegetables, fruits and nuts, or other parts of plants; furniture andbedding; rubber, and articles thereof; miscellaneous edible preparations; aswell as preparations of cereal flour, starch or milk. However, the sustainability of this revenuebuoyancymaybe threatened by several risks which may emanate from a resurgence of the COVID-19 virus, lower than anticipated global growth, disintegration or geoeconomic fragmentation, globalised inflationary conditions, the associated tightening of monetary policies and its implication for purchasing power andaggregatedemand, anchorageof recession fears andgeo-political tensions. In fact, the Council on Foreign Relations, in its 2023 survey, has highlighted some conflicts towatch, including an escalation of the war in Ukraine, security crisis in Asia, civil unrest inMexico andCentral America, as well as cyberattacks on the infrastructure of some of Jamaica’s major trading partners. International trade has long been promulgated as the pathway to sustainable growth and development. This ecosystem requires a realignment after multiple shocks, bolstered security, as well as efficient and effective actors (facilitators of the seamless movement of legitimate cargo and people across borders). The JCA, as a key actor, is cognisant of this requirement and is committed to continuous improvement, supporting new business models, and strengthening its revenue assurance mechanisms to grow its contribution to the GOJ’s total tax revenue and promote revenue adequacy, while contributing to economic stability and sustainable development. Contributed by: Shornalee Jackson, Revenue Analyst, JCA JCA’s contribution to GOJ tax revenue remains robust: entity continues to perform effectively THE PLANT Quarantine Produce Inspection (PQPI) Branch is Jamaica’s first line of defence against the introduction of exotic pests and diseases. This branch is mandated to ensure that only the highest quality, pest free plants, plant products, fresh agricultural produce and other regulated articles are exported from and imported into the island. In support of our mandate our major areas of focus for 2022 were: 1. Sensitising the Jamaican public regarding the threat of Giant African Snail 2. Improving the import process through JSWIFT 3. Trading Paperless Phytosanitary Certificates on the IPPC-Generic National System for Electronic Certificates (GeNS) 4. Expanding our services to exporters/importers through our outstations 5. Standardisation of our export processes through ISO/IEC 17020 accreditation GIANT AFRICAN SNAIL (GAS) GIANT AFRICAN SNAIL (GAS) The Giant African Snail is widespread in the Lesser Antilles, Trinidad and Cuba. It is approximately 15 cm in length and can go up to 20cm. This pest has not been detected in Jamaica. The Branch in collaboration with its stakeholders is currently conducting surveillance activities for this invasive species. Preparations are being made in the event the pest is detected. Webinars and identification training have been hosted as well as flyers distributed to aid in public awareness. JAMAICA SINGLE WINDOW FOR TRADE (JSWIFT) The branch launched the Import Permit application and Pest Risk Analysis processes on the JSWIFT Platform since March 1, 2021. This portal has been effective and has made the process of applying for an import permit and Pest Risk Analysis Plant Quarantine Produce Inspection Branch – crucial to maintaining Jamaica’s plant health Giant African Snail PLEASE SEE PLANT, 25
RkJQdWJsaXNoZXIy MTUzNTI=