MINISTER OF Finance, Dr. Omar Davies, appears to have taken tragically inappropriate advice in planning his new tax measures. None of them are designed to produce economic growth. All of them hit hard and with inequity against the legitimate business community in Jamaica. This community is being asked to pay more taxes and to pay taxes more quickly.
Minister Davies, as the advocate and designer of the Government's economic programme, has failed to implement measures that will encourage legitimate business to prosper.
Jamaica needs a dramatic change to its fiscal policy. The announced budget fails dismally to address the essentials of this change.
Billions of dollars of imports are coming into Jamaica untaxed. Importer after importer can, and has, told the Government that taxes can be dramatically increased by better supervision at our ports. The new four per cent cess on imports does nothing to improve tax collection at the ports. Every importer already has to supply TRN's and other identification to clear goods. The smugglers, who now bribe their goods out of the docks, will continue to do so. The legitimate businessman will now have to part pay profit taxes three to twelve months earlier.
Come on Dr. Davies, better was expected.
As usual these new measures have been introduced without the proper procedures for implementation being in place. None can say with authority whether the new cess can be set off quarterly, is refundable if taxes are less than the cess, or what treatment is going to be granted to start up companies not yet generating profits or companies with accumulated tax losses.
The cess is meant to raise $3 billion of taxes. For there to be any tax increase then this $3 billion must be after deduction of all set-offs with tax payments. If Dr. Davies can so readily identify that there are $85 billion of goods now coming in without paying proper taxes, why can Government not set up a mechanism to collect the due taxes? To demand that legitimate businesses must now borrow money at high interest rates to PREPAY profit taxes to the Government is abusing the law-abiding.
Dr. Davies has failed also to grapple with the runaway cost of the public service. Jamaica cannot pay the further promised wage increases to the public sector of near to 30 per cent over the next two years. What is being done about this issue?
These revenue-raising proposals are firmly anti-legitimate business. They penalise those persons who follow the law. They eliminate more business start-ups. They encourage the expansion of those businesses that smuggle goods into Jamaica. They suggest that the illegitimate business sector has much greater influence - whether through superior advocacy or corruption - than the legitimate business sector.
What is needed are clear signs of reducing the number of political offices, a smaller public service and every effort being made to encourage economic growth, job creation and legitimate business expansion.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
