The contentious secrecy provision contained in Section Four of the Income Tax Act may be amended as the matter was now being dealt with by the Attorney General, Parliament’s Public Accounts Committee heard yesterday. The committee, which was chaired by Bhoe Tewarie, examined reports for 2014 and 2015.
The provision prevented the auditing of revenue by the Auditor General’s office. But the Board of Inland Revenue said the provision was a key pillar to generate that level of confidence for the taxpayer.
Nayak Ramdahin, chairman of the board, said matters had gone to court due to breaches of confidentiality which in turn undermined the tax collection effort.
But legal officer of the Auditor General’s office, Nicole Cockburn, said it was stated in law the Auditor General must safeguard the collection of public monies and therefore access to such information which was traditionally denied was the only way that could be done.
Auditor General Majeed Ali, who also spoke, said there was urgent need to increase the staffing at the Auditor General’s office.
On challenges facing the Finance Ministry, permanent secretary Maurice Suite said the auditor general’s report on the public accounts reflected many inefficiencies which were fostered over the years in the public service.
He said those included archaic laws and the fact that the public service continued to operate on a “manual system”, governed by the Exchequer and Audit Act from 1959 which had had very little amendments over time.
“The public service has many challenges as it relates to the management of human resources. Given the rapid expansion and the number of persons employed in the public service in the mid 1970s, we are now experiencing a large rate of attrition as those persons reach the age of retirement which has resulted in a high turnover of staff.
“This rapid turnover is also highlighted by the fact that the human resource recruitment and planning essentially administered with persons moving from ministries and departments and in particular at the clerical level across technical streams,” Suite said.
He said, however, there was some progress made to modernise the system as the Integrated Financial Management System was expected to come on stream soon.
The Government, Suite added, had recently signed an agreement with the Inter-American Development Bank for the implementation of the system which would entail a computerised accounting system and management of information entered at one central location.
“It is a loan agreement with the IDB and that would have been done only in the last month. We have not reached the point of awarding a contract for the procurement of equipment. A co-ordinator has been identified and we are working on the contractual arrangements,” Suite added. He said since 1991 there were discussions to put the system in place.
“What has happened over time is because you have not kept pace with regular training you have had some bad practices built up into the system because persons pass down what their understanding of the system is to others coming in.
“As well as the comptroller of accounts going out to the ministries and departments on a more frequent basis to see what they are doing, this has led to a breakdown in the system,” Suite added.
Millions in overpayment
Member Marlene McDonald, who raised the issue of overpayments, said there were a number of issues at the Inland Revenue Division as it related to expenditure control.
She said there seemed to be a constant contravention of financial regulations and in particular six payments which totalled just over $1 million which was authorised in excess of the authorisation limit.
“So whoever authorised those payments that person or those persons were not so authorised to do .There is also a situation where vouchers totalling almost $1 million were issued without necessary certification,” McDonald said.
She said there were also payments amounting to close to $1 million in emoluments which were not reported to the Auditor General.
Suite, in response, said those issues were indications that the accounting and the human resource systems at Inland Revenue were not properly functioning. He added that the management and staff of Inland Revenue and Customs Excise Division were focused on collecting monies but not enough attention was being paid to “what was happening internally.
“They may be relying too much on the human recourse and accounting persons within those divisions and think they are competent enough but when you look at what’s coming out of the Auditor General’s report clearly that is not the case,” Suite added.