Business

Chuck says Jamaicans overtaxed

Friday, June 06, 2014    

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OPPOSITION Member of Parliament (MP) Delroy Chuck said Jamaican taxpayers are being punished with more taxes than they can reasonably bear.

"Jamaica is overtaxed. To satisfy the public expenditures and public debt, Jamaican taxpayers are being punished with more taxes than they can reasonably bear," Chuck told the House of Representatives in his contribution to the

current sectoral debate at Gordon House.

"While taxes are needed to balance the budget and get things done, it can be overdone. I have argued repeatedly that more taxation does not translate into more taxes. In fact, less taxation could mean more taxes," the MP said.

He pointed out that at this year's meetings of the House's Standing Finance Committee (SFC), which reviews the estimates of expenditure before they are voted on, the Minister of Finance and Planning Dr Peter Phillips noted that during the last fiscal year, in spite of the reduced GCT from 171/2 per cent to 161/2 per cent, more was collected.

"If we reduce the GCT rate to 15 percent, I strongly suggest more GCT would be collected. In the last administration, Minister Audley Shaw reduced Stamp Duty and Transfer taxes to three and four per cent, respectively, and more taxes were collected," he recalled.

He said that Phillips, instead of continuing the trend and further reducing the taxes, increased the duties on land transfers to four and five per cent and collected less tax.

"Burdensome taxation on businesses and the Jamaican people is actually counter-productive. It creates and generates major loopholes and avenues for tax avoidance and, simply, 'robbing the treasury'. Taxpayers know when enough is enough, and no amount of moral suasion and tax auditing will coerce them to pay more taxes than they think is just and reasonable," he said.

To avoid the burdensome taxation, Chuck said that many companies and individuals are now registering their businesses abroad, depriving the government of much-needed revenue.

"Custom duties are so high and punitive that many businessmen are prepared to take the risk and opportunity to cheat the revenue, which undermines the whole integrity of the system and promotes widespread corruption, deliberate delays and irregularities," Chuck argued.

"Major tax reforms are needed and may be on the way. But, taxation must not be an impediment to business expansion, increased productivity and economic vibrancy. Lower tax rates would spur more business expansion, greater economic transactions and, thus, the likely opportunities for more jobs and more taxes," he suggested.

-- Balford Henry

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