Peter Espeut THE LAST thing a government facing a doubtful General Election wants to do is to impose new taxes. Indeed, the Minister of Finance did everything except ask us to read his lips in telling us "No new taxes." So when just a few days later a cess on electricity bills is announced, to take effect in less than a month, and a law is being rushed through Parliament to give effect to the announcement, 'somet'ing inna somet'ing'.
But the public relations was badly handled. First the fact that the Parish Councils owe over $500 million in electricity bills to the Jamaica Public Service Company for the operation of street lights (recurrent costs) was given as the reason for the imposition of the cess; then this is denied, and the reason for the cess is given as the expansion of the system of street lights in the country (capital costs). Yeah! |
Then there is the question of whether the cess is a tax or not: the Minister of Finance unconvincingly denies that the cess is a tax, while the public relations message put out by the government on television explains that 'the cess is a tax.' At least the government is consistent in badly handling public announcements of unpopular matters.
The current official story put out by the government is simply not believable. If the cess is to expand street lights, why does that announcement have to be made just before the general election when any immature political analyst would easily predict it to have maximum negative effect? There can be no urgent rush to expand the number of street lights at this time rather than three months from now, that would justify this gift to the opposition of an issue guaranteed to win public support for them. Somet'ing must be inna somet'ing!
The news on the street is more credible: that indeed it has to do with a massive unpaid electricity bill for street lights, and that the power company, now privately owned, is unwilling to absorb the cost of street lights into its operating budget as was done when it was owned by the government. As politically painful as the news of the cess is, the shutdown of street lights across the country (in the middle of the biggest crime wave in the history of Jamaica) just before a close general election would be even worse. Desperate times call for desperate measures, and the cess is a desperate measure!
Note the implications: whether we knew it or not, all along we have been paying through our electricity bills for the streets to be lit. When the JPSCo absorbed the cost (and the cost of unpaid household bills in the garrisons), they passed it on to us. I always knew it: we could have had cheaper electricity! Those funds which all along we were paying for street lights will now go to profits for the foreign-owned electricity company, and we will have to pay more money again to keep the same street lights lit! (Who is going to pay the garrison electricity bills?)
Time is clearly of the essence! Yes, the collection of land taxes (part of which is supposed to pay the bill for street lights) could improve, but it would take too long to raise enough money. The bill had to be paid now! Yes, land taxes could be increased (despite the '"no new taxes"' promise) to provide more money to pay for street lights, but it would still take too long to get enough money to pay an outstanding bill of $500 million, plus the new monthly bills. Urgent action had to be taken now! Hence the cess. It is good to know that the government can take quick action when they are pushed into a corner, when the matter is important enough.
Those of us in the underfunded/non-funded environmental movement take note!
Clearly the '"no new taxes"' announcement by the Minister of Finance was more political than fiscal; but the announcement of the cess was pure fiscal.
Note that the JLP is not using 'no new taxes' as a campaign slogan. Indeed we can expect the JLP to announce the imposition of many new taxes to 'pay the PNP debts', and the return of the 'tax axe'- man. In that way, the JLP can inflict the pain, but the PNP gets the blame. Taxation in Jamaica is pure politics.
Over the last year, the government has been able to collect new revenue without it being called 'new taxes' and so maybe they thought they could get away with it again. When a certified copy of a birth certificate (which used to cost 30 cents) now costs $390, is that not new taxes? When genealogical research (which previously was free) now costs $6,000 'per generation' as they call it, is that not new taxes? Of course they will say that the government is only recovering the cost of delivering a service to the public. But for the last 120 years the government covered that cost through taxes, and now the public is being asked to pay for it.
And will our taxes now be reduced since we are paying for what the government previously had to use taxes to pay for? Don't bet on it!
So I expect the Minister of Finance to keep his word, and that there won't be any new taxes; but I do expect a number of these tax replacement cesses and charges as well as new sources of government revenue as more executive agencies are created to be announced in the coming months (after the election, of course).
Expect a cess on water bills to cover the costs of installation and repair of fire hydrants; and a cess on telephone bills to cover the cost of law enforcement; and a cess on soft drinks in plastic bottles to cover the cost of solid waste management; and a cess on cigarrettes and alcohol to cover costs of the health care system; and a cess on bookshops, book publishers and newspapers to cover the cost of the education system. None of these are new taxes, the Minister will say. Right!
Peter Espeut is a sociologist and is executive director of an environment and development NGO.
