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Tax Collections Up From Last Year, Still Lag 2008

Tax revenue collected by the V.I. Internal Revenue Bureau is a little higher so far this year than at the same point last year, IRB officials said during Senate budget hearings Friday in Frederiksted.

The improvement indicates somewhat better economic circumstances. In all of fiscal 2009, IRB collected $582 million in taxes for the V.I. government; a 28 percent reduction from the year before, according to budget information provided by IRB Director Claudette Watson-Anderson. As of June 30, IRB had collected $471.7 million, exceeding the $427.8 million collected by the same time last year, but still far less than the $597.5 million collected in fiscal 2008, according to IRB data.

IRB is responsible for the administration and enforcement of the territory’s tax laws. It collects corporate and individual income, gross receipts, trade and excise, production, highway user’s, hotel occupancy, fuel and other miscellaneous taxes.

So far this year, IRB has processed 26,634 tax refunds totaling $74.3 million, Watson-Anderson said. IRB’s free Taxpayer Assistance program helped Virgin Islanders complete 1,445 returns between February and April too, she said.

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To improve collection of delinquent taxes, this year IRB used a $580,000 Interior Department grant to start scanning all filed documents in the Bureau’s Tax Processing System. A contractor, a company called Scan Optics, has been identified, and "we expect to have the contractor on board by next month," Watson-Anderson said.

Meanwhile IRB is pushing for greater collections on other fronts. It has increased field audits and increased collections on delinquent accounts to $34 million, exceeding their target by more than $1 million, she said.

IRB has launched a matching program to detect under-reporters and non-filers—the program is still in development, with files being exchanged to facilitate the first phase of the process. The bureau also improved its annual tax update to include a section on training for ethics and professional conduct and formed a labor management committee to address issues such as safety, communication and efficiency in the workplace that can be resolved prior to the grievance process.

The bureau will be relocating its offices to East End Plaza this November. Architectural and engineering designs for an expansion of the Bureau’s St. Croix office are underway, according to Watson-Anderson.

For its fiscal 2011 budget, IRB is requesting $10.4 million from the V.I. Government’s general fund. Of that, $6.2 million is for wages and salaries and $2.3 million for benefits for its 157 employees, of whom 100 are on St. Thomas, 54 on St. Croix and three on St. John, she said. Another $1.6 million is earmarked for lease agreements, recurring telephone and other communications costs.

This year’s appropriation is a whopping 24 percent reduction from last year. However, Legislative Post Auditor Jose George said much of the reduction was the result of one-time capital expenses made last year, and on an operational level, IRB was looking at a real reduction of around seven percent — roughly similar to that faced by all executive agencies this year.

No votes were taken at the budget oversight hearing. Present were Sens. Nereida "Nellie" O’Reilly, Terrence "Positive" Nelson, Carlton "Ital" Dowe and Craig Barshinger.

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