PRESS SECRETARY

OFFICE OF THE PRIME MINISTER

Email: pmoffice@gov.gd                                Website: www.gov.gd

   Phone: 1- 473- 440-7258 or 1- 473- 440- 2255      Fax: 1- 473- 435- 7285

 

 

NEWS RELEASE

 

CARTAC Provides Technical Assistance to Government in the Tax Collections

 

Thursday, July 19, 2007, St. George’s: In advance of the implementation of Value Added Tax (VAT) in Grenada, the Government of Grenada is working to reduce the outstanding Inland Revenue Department (IRD) arrears. In this regard, the staff of the Recoveries Unit of the Ministry of Finance, which was established in February 2007, is currently undergoing a 5-day training workshop in tax collections at the True Blue Bay Conference Room, St. George’s. The workshop, which commenced on Monday July 26, is being facilitated by Collection Enforcement Consultant, Ms. Maria Mihaly, who is a CARTAC consultant with extensive experience in collection enforcement activities who has provided support in this area to several Caribbean countries in the last year. 

The workshop is part of a two-week assignment for Ms. Mihaly who has been working with the Grenada authorities from July 9th 2007, providing technical assistance in the area of tax collection.  As part of her assignment, Ms. Mihaly has been requested to:

(i) review and assess the revenue collections legislation and regulations in Grenada for all IRD-administered taxes, including the draft VAT legislation. Specifically review: (a) collection enforcement powers; (b) penalty and interest regime; and (c) collection enforcement procedures.

 

(ii) provide suggestions for relevant legislative reforms, taking into account modern legislation and regulations linked to required powers under a sanctioned regime.

 

(iii) review and assess the revenue administration. Specifically review:  (d) organization and staffing of the collection enforcement function; (e) managing the collection enforcement function; (f) management information (reporting) systems; and (g) training.

 

(iv) provide suggestions for relevant administrative reforms, taking into account modern best practices and the Grenada environment. 

 

(v) provide information sessions to management including an overview of basic concepts and definitions on the subject, set out the main elements of an effective arrears collection program based on the practices of mature tax administrations, identify common problems that plague the collection enforcement programs in many tax administrations.

 

(vi) prepare with the authorities a detailed reform action plan to strengthen the collections enforcement program.

 

(vii) deliver a collection enforcement training course (5 days) including examples and exercises which discuss and address the following topics:

 

(1) Legislation

(12) Locating Taxpayers, their Income and Assets

(2) Collection Organization

(13) Third Party Information

(3) Responsibilities of Staff and Chief

(14) Interviewing and Meeting with Taxpayers

(4) Collection Process

(15) Fieldwork

(5) Progressive Collection Action

(16) Reviewing Books and Records

(6) Prioritizing Collection Workload

(17) Requirements

(7) File Organization

(18) Seizure of Property

(8) Collection Action Plan

(19) Bankruptcy

(9) Analyzing Financial Statements

(20) Director’s Liabilities

(10) Ability to Pay

(21) Uncollectible debts

 (11) Collections Arrangements

(22) Supervisor’s Review

 

The main objective of this exercise is to provide diagnostic, technical assistance and classroom training services to complete a review of the current operations and to support the implementation of suggestions in strengthening the collection enforcement program and the transfer of knowledge and building of human capacity to Inland Revenue Department.

 

Tax arrears and programs to enforce the collection of tax arrears present major challenges for all tax administrations. In some countries, tax arrears have risen to such high levels as to jeopardize the government’s and region’s overall fiscal balances. In other countries, where the level of arrears has reached less alarming levels, the failure of some taxpayers to pay their taxes on time and in full puts the credibility and fairness of the tax system at risk. The combined experiences of many countries have demonstrated that the viability of a tax system based on the voluntary assessment and payment of taxes rests on, among other things, effective arrears collection programs.

 

This technical assistance will strengthen local departmental integration by developing collection enforcement program standards, techniques and methods based on international best practices.

 

The workshop for the Collections Officers end on Friday July 20th, 2007. Ms. Mihaly’s current assignment also ends on Friday; however she will be back later this year to review progress on the implementation of the recommendations made in the report from this assignment.

 

 

Ministry of Finance

(473) 440-2731/435-0057