Durrant Pate/Contributor

Tax Administration Jamaica (TAJ) is seeking to set the record straight with respect to two properties in Annotto Bay and Mandeville, which it has leased and expended over J$356 million but has still not been occupied two years later.

Auditor General Pamela Monroe-Ellis found the TAJ wanting in its handling of the matter in her Special Audit Report, which was tabled in Parliament on Tuesday (March 26).

In a news release on March 27, TAJ blames onerous Government of Jamaica (GOJ) procurement system for the current state of affairs.

According to TAJ, “properties were leased in Mandeville, Manchester and the other in Annotto Bay, St. Mary in accordance with the GOJ Procurement Policies that require a lease to be in place before commencing the process to procure technical service and to renovate. Once the lease is in place then TAJ is liable to make payments. The delay in occupancy is attributed to the lengthy procurement process and build out required to make the space suitable for the delivery of tax services, which in the instance of Mandeville had to be restarted and both are still ongoing.” 

Explanation given

TAJ explained that in an effort to construct a one-stop-shop Revenue Service Centre (RSC) in Mandeville, the property was leased to accommodate general tax office services currently offered from two locations, South Race Course Road and Audit operations from a plaza at Caledonia Road. 

Noting that the current arrangement at Mandeville does not provide the convenience of all the services at a single location and this has proven to be costly and inefficient to the tax paying public, it was decided to lease property to conveniently accommodate tax operations currently being done separately. 

The GOJ procurement process requires a signed lease for the property before commencing the procurement to engage technical and contracting services for works. The procurement process for renovating the space of the size leased for the RSC operations requires Cabinet approval and a consultant to manage the project. It therefore means, two separate procurement processes (one for the consultant and another for the build-out contractor), which cumulatively can take up to 14 months to complete. 

In addition to the lengthy timeframe for the process, TAJ added that the procurement for the building contractor failed on the basis that four additional contractors in the category, which responded to its invitation for bids were added to the procurement platform. This was after the expression of interest phase but before the date for return of bids in August 2, 2023. 

The lease arrangement for this location was handled by the National Land Agency (NLA) with the process commencing on April 13, 2018, with the lease agreement duly signed by the lessor and TAJ and was completed in September 2020 (30 months later).

Procurement for Annotto Bay premises

Turning to the procurement process for the Annotto Bay property, TAJ said a former bank was identified as an ideal building (fit for purpose based on similarities between our operations) to relocate the Annotto Bay Tax Office, which was deemed to be in need of major repairs. Given the location, size and amenities offered, such as cashiering and customer service counters, vault and parking, the building in question was considered well suited to serve the needs of the community and TAJ.

In considering leasing the property, TAJ said it utilized a private valuation entity, based on January 8, 2020, advice by the NLA and in keeping with its Standard Operating Procedures (SOP) for identifying and leasing space. TAJ outlined the following is the timeline on the arrangement for leasing the space and subsequent activity to retrofit it for relocation of the Annotto Bay Tax Office:

1. Inspection of report done by TAJ’s team to confirm suitability conducted on July 20, 2021.

2. Expression of interest was made on August 25, 2021, via letter of the same date.

3. Valuation conducted on October 30, 2021. All procurement protocols had to be observed before the valuation surveyor could be engaged and despite using a private entity it still took two months to get it done.

4. Lease was negotiated and duly signed on December 17, 2021.

5. Upon taking possession of the keys for the premises on January 7, 2022, and entering the space, it was evident that changes were made to the layout of the space. Consequently, a letter dated February 10. 2022, was sent from TAJ to the owners requesting that the space be restored to its original state. 

6. In keeping with GOJ Procurement Policy, the process to buildout, occupy and open the space cannot commence until a lease agreement is duly signed. This process which is currently in progress, involves several steps including preparing, adjusting and finalising architectural drawings that took six months and were approved in April 2023

7 Engagement of Quantitative Surveyor, who assessed the drawing and determined the cost (bill of quantity) for the building out of the space, which took approximately six months. Procurement of the build-out contractor who is to carry out the work to facilitate occupancy, work will commence thereafter and may take four months at minimum to complete. 

Existing situation 

The current situation is that the existing Annotto Bay Tax Office has been closed since the earthquake on November 3, 2023. The 5.6 magnitude quake exacerbated the poor condition of the building and a structural engineer’s report rendered the building unsafe for occupancy. Fortunately, TAJ had already leased the new space and the engagement of the contractor is at the evaluation stage. 

Based on the timelines the Annotto Bay Tax Office should be open for business at the new location within the second quarter of the 2024/25 fiscal year. TAJ said it remains committed to observing the requirements of the GOJ Procurement Policy as it works to provide suitable accommodations for customers and staff.