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Government ripping off Jamaicans, people say

Jamaicans describe new revenue collecting measure by Gov't as highway robbery

BY DONNA HUSSEY-WHYTE Sunday Observer staff reporter husseyd@jamaicaobserver.com

Sunday, April 20, 2014    

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JAMAICANS yesterday reacted with anger to last Thursday's announcement in Parliament by Finance and Planning Minister, Dr Peter Phillips that new taxes will be slapped on Automated Teller Machine (ATM) withdrawals, as well as on all electronic banking transactions.

That anger will likely boil over later this week after more details emerge on the new taxes.

Phillips, in opening the 2014-2015 Budget Debate, announced the new levy on the use of ATMs, also called Automated Banking Machines (ABM).

The move is due to take effect June 1 and seeks to raise a portion of the overall $6.6 billion in additional taxes from a population that financial analysts have said is already over-taxed.

Some citizens interviewed by the Jamaica Observer yesterday said that they have had enough and were not prepared to accept the

latest tax.

Paul White, 46, a higgler in the Constant Spring Arcade, described the tax as "robbery" by the Government.

"Government a tief! That is highway robbery!" an irate White blurted out to the Sunday Observer.

"Mi can't put down my money in the bank and they expect me to pay to take out my own money. That's highway robbery. I'm very, very upset, very, very upset. Right now I don't even know which one of these government is the better one. Every one of them is the same thing," he fumed.

White said that if there was no change to the decision taken by the Government, he will have no choice but to limit or cease his dependence on the bank.

The anger of Karlene Spencer, 40, was palpable.

"Let me tell you something, you see right now, the PNP (People's National Party) Administration is actually giving this country more than what we can bear. Honest to God, that can't be right, that is straight robbery! When you look at what is happening -- things already too expensive and you tell me that if I have $1,000 in the bank and I go to the machine that I am going to be taxed? So what poor people ought to do?" she asked.

"The rich man can just write a cheque. Anyway you take it the pressure is on the poor in this country and only the fittest of the fittest shall survive when PNP done with us. I just come back from London and it tough there too yes, but I could use a pound and do many things. And anywhere you see a machine it say free cash withdrawal. It doesn't matter which bank you have. It's a total disgrace to humanity in this country. Who are these people? They are some monsters from hell or what?" Spencer said.

Phillips on Thursday announced that taxation from these entities is expected to reap $2.5 billion in revenues through withdrawals from deposit-taking institutions through electronic banking, point of sale transactions (debit cards), cheques, banking hall transactions, ABMs, ATMs, ETMs and Internet transfers. The only exception will be Internet transfers made by someone between his accounts in the same financial institution.

The levy will also be imposed on all encashment from securities dealers, for example, each payment made by a licensed securities dealer to any of its account holders or on their instructions arising from the full or partial encashment or withdrawal of funds.

Private Sector Organisation of Jamaica (PSOJ) President Christopher Zacca yesterday said that while he was still trying to understand the announcement, from what he knew a transaction tax will be levied on businesses and this would be a disincentive to companies to be a part of the formal banking system.

"I think the tax is a transaction tax, that is a tax on all flows from formal banking accounts and other deposit accounts in other financial institutions, and as such, to me it is really a disincentive to be a part of the formal banking system. Also, to have a transaction tax at a time when the economy is tight and under pressure would put a higher cost on transactions and therefore a hindrance to growth. As such, I think it is ill-advised," Zacca said.

He said that the Government should have looked at increasing the minimum business tax, which was just implemented on the recommendation of the PSOJ, and which has the potential to bring in just as much as the $2.5 billion needed by

the Administration.

"This is a more progressive tax in the economic situation which we are in," he stated. "That tax is where you pay a minimum income tax, even if you don't declare a profit. It is not a big amount, but when you add it up among all the companies that don't declare a profit annually, it will come to a lot of money -- couple billion dollars, so it would have been as much as this other tax," he said.

Businessman and chief executive officer of the MegaMart chain, Gassan Azan Jr said that the levy will be a huge cost to businesses in Jamaica. However, he is awaiting the breakdown to see how the tax will actually be applied before he is able to ascertain the extent of the effect.

"Let's say I have payroll accounts; every week I have to fund my payroll accounts if I pay my staff electronically. So it will affect us, because that would be a transfer fee right there. But we just have to wait for the breakdown," he said.

Yesterday, more anger was evident on the streets of the capital as the new tax measures sank deeper into the minds of ordinary Jamaicans following the Good Friday holiday.

"It don't right, yuh know, because you have to work so hard for yuh money, then when it go the bank yuh have to pay tax and when yuh go the machine yuh still have to pay tax," Glenroy Grayson said.

"There is too much tax! And we just can't support it," the 52-year-old said.

Lorna Beckford and Suzette Lewis, who were conducting business in the St Andrew capital of Half-Way-Tree, shared Grayson's view.

"So, if mi have a $1,000 in the bank and mi suppose to pay mi light bill mi can't even pay mi bill because that money now short because mi have to give Government tax out of it," she said.

"I think the system is going backwards. Is a God damn shame! What I want to know is what is the prime minister's expectation? Mr Peter Phillips needs to get a hold of himself too," Beckford went on.

"You already pay to use the machine and now they going to tax you again," Suzette Lewis added. "So you suppose to pay to use it and pay tax? No, that can't right. That is highway robbery," she added.

Floyd Quarrie, 28, said that the Government's priorities have been misplaced and described the latest measure as a scheme to squeeze more from the small man.

"I think it's a scheme. You get charge for deposit, charge to draw, charge to change cheque, so you get taxed for everything," Quarrie said. "I think they could have come up with better ways to do that.

"For example, they cut the custom charges for vehicles coming in for tourism, but then they going to charge tax from the little man who do withdrawals, etc. I think it's counter-productive. The priorities are really misplaced.

"As much as the tourism sector needs help, there are other ways, because that could have been a means of obtaining additional funds that the Government might have needed, so they could probably limit or not look to tax something as simple as withdrawals. So now we are just being driven to resort to mattress lifestyle," he said.

Zena Fairweather, 37, also had harsh words for the levy.

"That is sin. It's already hard in Jamaica. People already can't afford to pay light bill, they can't pay rent and they don't have money to do certain things, so if it was not for the good Lord, plenty of us would die," she lamented.

"Why should people be paying to draw their own money?" she asked. "That is unfair, because you investing in the bank to make money grow on it so you can live and eat food; why they feel they should be taxing it?"

Taxi driver, 54-year-old Lascelles Cunningham said that he never agreed with the PNP Administration since it returned to power in December 2011, so in his book the new tax is just an additional strike against the Government.

"Whatever strain or problem the country falls into they always take it out on the people. It's always the people who have to bear the penalty, so it's not anything new," Cunningham said.

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