Tax Reform in Jamaica: It’s All About Capacity Development

Over the last ten years or so, the Caribbean island nation of Jamaica has implemented a broadly successful programme of tax reform, offering an interesting case study that stresses the importance of capacity development for long-term success.

Speaking at a recent Tax Reforms Seminar in Brussels organised by the European Commission in June, Vinette Keene, former Director General of Tax Administration in Jamaica from 2005 – 2007, offered her insights.

Like many other developing countries, the main aims of Jamaica’s tax reform were to increase tax payment compliance and government revenues.

“Increased compliance for sure [was an objective],” said Ms Keene “And increased revenues, which are critical and always a focus of developing countries and governments because the resources are always limited.”

Voluntary compliance is particularly important in developing countries, according to Ms Keene, as they typically don’t have the necessary resources to pay for an expensive tax enforcement programme.

Much of the reform’s success in this area rested on a concerted campaign to improve the image of the tax system in the eyes on the Jamaican public.

“There was a tremendous improvement in the public perception of the organisation,” said Ms Keene, with tax offices across the country spruced up with redecorated offices, new equipment and a generally more professional look and feel.

Donor support was essential to the success of Jamaica’s tax reform.

“We could not have done it without the donors,” said Ms Keene. “Their contributions came in the form of grants and loans. The major reforms we’ve had have all been supported by donor funding and, in addition to hardware – computer equipment, furniture and other resources - we also got technical assistance, significant technical assistance, to build capacity.”

Without this capacity development focused technical assistance, the reform would have not been sustainable, said Ms Keene.

“The key message here is to build the local capacity. Oftentimes we run the risk of expert delivery from donors that ends up delivering us  products but not leaving the knowledge behind,” said Ms Keene.

“There should be a deliberate attempt on the part of donors that local country counterparts are assigned, and assigned full-time, so that they’re focused on the project, on the programme, on the reform, in order that we can have this continuity.”