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Jamaica will strengthen its fiscal administration with IDB support‪

A $65 million loan to improve customs and tax collections, and manage debt and government payment operations‪

Jamaica will modernize its fiscal administration to improve customs and tax revenue collections and better manage debt and government operations, in a program partly funded by a $65 million loan from the Inter-American Development Bank (IDB).‪

This program will support the Government of Jamaica's strategy to achieve a sustainable fiscal position by strengthening the Ministry of Finance's institutional capacity. It will also improve taxpayer's compliance and revenue yields through more efficient administration and collection procedures, and will help improve debt management and government payments operations.‪

In order to achieve its objectives, the program will focus on four components:‪

  • Modernization of Tax Administration – This component will include strengthening the institutional capacity of the Tax Administration in Jamaica to convert it to a Semi-Autonomous Revenue Agency (SARA); improving enforcement and taxpayer services; and upgrading physical and technological infrastructure.‪
  • Customs Operations – This component will strengthen the capacity of the Jamaica Customs Department while supporting risk management, enforcement and trade facilitation.‪
  • Debt Management System – This component will improve the front, middle and back office operations through investments in updated procedure manuals, technological infrastructure, business models, a user-friendly Web page and activities related to the Public Enterprise Debt Management.‪
  • Central Treasury Management System – This component will review the current legal framework; modernize the technological and physical infrastructure; develop a change management strategy; and introduce a risk assessment and business continuation plan.‪

The program is expected to achieve its goals by 2016 through a decline in the gap between actual and potential collection of the General Consumption Tax. With the project, the gap is expected to fall to 36 percent from 45 percent. 

Moreover, the project will contribute reducing the percentage of large and medium taxpayers that fail to file their tax forms from 6 percent to 2 percent of the total filings. On the customs side efficiency will increase the adjusted monetary value of Post Clearance Audit assessments and raise the percentage of cargo manifests and import/export declarations processed electronically in advance from 57 percent to 100 percent.‪

The IDB loan is for a 20 year period, with a grace period of 5 years and an interest rate based on LIBOR.

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