Jamaica based Digicel has responded to a raid by the country’s tax authorities and has filed an affidavit in the Supreme Court to claim that a warrant granted to the Tax Administration Jamaica (TAJ) was “fundamentally flawed as the analysis performed by TAJ reveals utter and complete incompetence”.

The tax collectors are reported to have found discrepancies in the revenue reported by the company and the actual amount it had earned – leading to potential tax liabilities. A raid on Digicel’s head office then took place on Friday when the tax collectors were apparently accompanied by “heavily armed” police.

Digicel says that for the three-month period under investigation, the tax authorities claimed a discrepancy of J$111 billion (US$1.256 billion).

Digicel notes that this is equivalent to every person in the country spending additional undeclared J$13,762 (US$158) per month – a sum so large that it should have “rung alarm bells” at the tax collector as being totally unrealistic.

Digicel claims that a cursory look at its audited financial statements, which TAJ has, would have shown that its conclusions implied that the annualised TAJ derived sales number was ten times greater than the number audited by its external auditors, PwC.

Certain documents which TAJ maintains were not provided by Digicel were provided in February and March and this fact was acknowledged by TAJ’s representatives after they entered Digicel’s premises last Friday and were shown what was previously sent to them.

In court, Digicel’s attorney, Paul Beswick, advised the court that Digicel is willing to sit down with TAJ and go through the data supplied and Digicel is now waiting to hear back from TAJ as to whether it wishes to do so.

Digicel and TAJ are next due in court on May 24th 2012.