2003 through dazed eyes
published: Friday | January 3, 2003
THE YEAR 2003 is up on us, and while some may still be in stupor from sipping hefty doses of sorrel (and other more potent alcoholic beverages), or dazed from smoking Jamaica's famed illegal weed, or just stressed out from a frantic shopping spree over the last few days, or bleary-eyed from partying heavily, the new year will find many of us with dazed eyes, as tax increases hit us left and right, faster than a Lennox Lewis combination.
As I don't smoke or drink alcohol, my dazed look is in bewilderment at the likely deteriorating economic environment, due to the slipshod approach to fiscal management, and yet I had in previous articles pointed to this likely scenario in post election circumstances. No, I had not asked Madame Cleo for advice (shucks, she is not even Jamaican, and has just been put out of business by the U.S. courts) but one can foresee high interest rates, some amount of capital flight, serious industrial relations problems, especially over wages and 'perks', and more social deterioration.
It doesn't take a pre-schooler to recognise that several things just won't fit (e.g. putting square pegs in round holes) and the general public will feel the strain of bearing the burden of fiscal adjustment. The large informal sector (conservatively estimated at 43 per cent of G.D.P. by the PIOJs 2002 study) will continue to laugh at the efforts of the honest and responsible citizens to meet these tax obligations.
The government's tax collectorate has not been able to make a large dent in this informal sector, despite a decade of trying. Unable to collect from this informal sector in entertainment, construction, commercial sales and various other activities, due to low punitive fines, reluctance to jail miscreants for repeated breaches, and the considerable involvement of high placed (and low-placed) functionaries in the public service (in short, an euphemism for corrupted individuals), the state has always been quick to raise taxes on the formal sector.
