REID

Days ahead of the March 31 deadline to file NHT returns, the state housing agency has warned that it is devising harsher punishment and a more effective system to track employers who fail to follow through on their statutory obligations.

The National Housing Trust knows that not all employers eligible to pay over employees' two per cent contribution and their three per cent of gross payroll are compliant, but what it does not know is how much it is truly owed, nor all who are evading its net.

Anomalies surface

Often, the anomalies surface when employed persons apply to the Trust for refunds or housing. Such persons are denied access to NHT's benefits even if their employers had deducted the payroll tax from their wages.

"It is difficult to estimate the current level of compliance because the Jamaican economy has a high level of 'grey' market activities which is difficult to quantify," said NHT senior general manager of finance and operations Hugh Reid.

"But, we will eventually catch up with you."

Reid issued his warning at a 'compliance seminar' hosted by the Trust last Thursday and attended by about 75 private and public sector company representatives.

Last year, under a conditional amnesty offered by the NHT, the agency said of the $2 billion it estimated was in arrears from private company and individuals, arrangements were made to clear about half a billion dollars.

Even cash-strapped state agencies have been guilty of non-compliance, for which the state has been making recompense through land deals. As part payment for the $7 billion owed, government had identified 3,000 acres of land for transfer to the NHT.

Employers are required to remit payroll deducted contributions to the NHT each month. The payments are due on the 14th, otherwise penalties accrue at a rate of 40 per cent per annum.

The annual return details how much the employer has paid in contributions, as well as lists the employees on whose behalf the payments are made.

"Some companies do not want to submit their annual returns because theyare afraid that we will become aware of their indebtedness to government," said Reid.

Taxpayer registration

The returns require proof of taxpayer registration by the employer.

But the housing agency executive invited the employers to weigh that against their obligation to their staff, particularly in respect of their NHT and NIS payments, because of the implications.

"The extent to which you are not compliant is the extent to which you jeopardise the ability of your employees to benefit," said Reid, quoted in a release from the state agency.

The seminar is the first in a series, says NHT, to increase awareness among employers about their statutory obligations.

Reid also said failure to pay over contributions impacted the NHT's own ability to finance housing and mortgages.

But, the agency has consistent growth in contributions over the years, recording its most robust growth of 18.6 per cent in the April 2005-March 2006 year when returns topped $8.3 billion - the prior year's $7 billion resulted from a 16.7 per cent increase in contributions - but the Trust's financials also show that at the peak of its growth in contributions, ramped up housing expenditure of $7.7 billion together with contribution refunds to employees of $2.1 billion eclipsed that income by more than a billion dollars.

business@gleanerjm.com