Revenue seeks compliance, wields a stick
An announcement by the Minister of Revenue, Tialavea Tionisio Seigafolava two weeks ago that the Ministry had been set a target for tax collection was good news for the majority of taxpayers.
We say the majority, because it has been one of the worst kept secrets for years that collection of taxes has never been systematically or fairly done which means many people have avoided full payment or simply not paid at all.
One of the areas where systems have been particularly lax has been the Customs Department where allegations have been made about payments deferred, favouritism of particular clients or partial payments accepted in lieu of the total.
The fact that five years previously, the Minister said an average of five percent was not achieved by the Ministry whereas for the month of July 2016-2017, thirty seven million had already been collected with 40 million (six percent) expected for the month of August.
This suggested there was a genuine drive to collect the taxes.
So the announcement by the Minister that first they had set a target of half a billion for the year, provided some hope that there was a plan.
Yesterday, we received notice of a plan.
The ‘Compliance Improvement Plan 2016 – 2018’ will be introduced by the C.E.O. of the Ministry for Revenue - Avalisa Viali-Fautua’ali’i in his Keynote Address and it ‘sets out major strategic risks that the Ministry for Revenue will put its priority focus on over the next two years.’
The plan is said to build on the 2012 -14 Compliance Improvement Plan which was developed to address risks in Inland Revenue and was developed by the Senior Management Team of the Ministry for Revenue in late 2015 together with the assistance of a consultant.
From the broad description of the Plan, several significant factors stand out.
Whilst it relies heavily on people’s honesty and sense of fair play where payment of taxes is concerned – compliance being the key word, given past experience, the document is majorly concerned with minimising inherent risks.
This is clearly spelled out.
“A tremendous amount of work has gone into segmentation of the tax base, data mining and analytics that has identified main risks. The tax system needs to be seen as fair – and it cannot be fair if those who are evading their taxes are getting away with it – that’s why risk analysis is fast becoming a big tax administration priority.
It is also clear that for those who do not comply, there will be consequences.
And finally, “Achieving the outcomes set out in the Plan will improve compliance and consequently improve revenue collection and a safer border for Samoa.”
We can but hope.