Editorial

A government that listens gets re-elected — Part 2

Sunday, May 04, 2014    

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Last week Sunday, we argued in this space that the imposition of the withdrawal tax, dubbed the ATM tax, presented an opportunity for a caring government to demonstrate that it is listening and it understands the pain of the people.

This week, we must commend the Government of Prime Minister Portia Simpson Miller and her Finance Minister Dr Peter Phillips for doing just that, by scrapping the withdrawal tax.

Our sense is that the country is very happy with that decision and that the Government has won itself, not just kudos, but even greater patience and understanding from Jamaicans who are toughing it out at this time of severe austerity.

We do not for one minute believe that it was easy to withdraw the tax, given the lack of revenue-raising options faced by the Administration. But we hope that the Government would have learnt at least one important lesson: exhaust all options before slapping new taxes on the masses.

It is full time that the promise made by successive governments year after year that they would go after tax evaders be kept. It is shameful that the majority of people who should be paying taxes have been allowed to get away scot-free, while a small minority of law-abiding Jamaicans are taken to the cleaners. The most tax-oppresed people are the so-called PAYE or Pay-As-You-Earn Jamaicans, from whose earnings income tax is taken before they even receive their pay packets.

There are large numbers of doctors, lawyers, self-employed business people like hairdressers, barbers, tailors, shopkeepers, florists, market vendors, electricians, plumbers, builders, and an almost inexhaustable list of people who don't pay one cent of taxes.

In this time of austerity, the Government should go all out after these people with every ounce of state power at its command. If it is really that difficult to collect from them, the Administration should resort to a measure such as GCT, which is hard to escape. We note that there have been suggestions that income tax be abolished and replaced by higher GCT.

Of course, the Government will also need to step up its tax-collection machinery so as to be in a position to collect the GCT which, in too many cases, is being deducted at source but not being paid over to the Government. There are also far too many people who are deducting NIS, education tax, NHT contributions and the like and not handing them over.

Let's take a leaf out of the book of the Internal Revenue Service (IRS) in the United States and go after these tax thieves with jail sentences. A cruel irony is that the tax evaders include public sector agencies.

Again, we strongly believe that if the Government has no choice than to implement a withdrawal tax it can be an effective tool to go after people whose names do not appear on the income tax roll without good reasons.

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