Wednesday, February 13, 2013

I don't know. Honestly, I don't.


Before anyone accuses me of not putting forward alternatives to address our fiscal situation, let me preface by saying that I do not have to. Very qualified, successful, respected people have put forward multiple solid, sustainable proposals that have seemingly fallen on the cement-laden ears of successive governments. Workable alternatives already exist.

I won’t spend any time discussing the credibility of the People’s National Party. I am not even going to talk about the dizzying arrogance of the Prime Minister and her (oversized) Cabinet. I am overlooking the tales of members of the Cabinet revelling and enjoying sweet sweet mas in Port of Spain—no doubt on their own dime—while the entire country sat in the dark about our economic situation. And there will be no mention of the fact that as we barrelled towards economic uncertainty, one member of the People’s National Party, decided to engage two social media platforms in a conversation about homosexuality, his Bible and the all important Tommy Lee. I asked him about the declining value of the Jamaican dollar and he is yet to respond.

I do not propose to be an analyst. I do not propose to be an advocate. Right now, I am a Jamaican. A young Jamaican who for decades to come will be straddled with the after-effects of the absolute nonsense happening now. I am not on a quest to examine which party or person is at fault or who is right or wrong. I just want some clarity on a few things.

The current Government of Jamaica (GOJ) presented an initial tax package that was true to the promised ‘bitter medicine’ we were expecting. Now, the GOJ has announced an additional tax package making the revenue target $40b. Emily Crooks says this is the largest tax package ever.

Errrmmm????? The GOJ cannot even run a tax amnesty properly. If they are having so many issues in reaching current revenue targets… what is in that coffee at Jamaica House that has them thinking they can hit a higher target? Is the GOJ cutting spending somewhere? Smaller government? That wasn’t included in the documents Peter Phillips tabled in Parliament—which surprised the entire nation—or the historic joint national broadcast with the Prime Minister, so… I don’t know.

I got a copy of the tax measures (and yes, the GOJ repeatedly mentioned that it is “committed to broadening the tax base and ensuring revenue adequacy”) and included in the GCT measures are inclusion of the Telephone Calls Tax (TCT) as part of the GCT base. This is expected to yield $1.3-billion and would “be included in the taxable base for the purpose of calculating the GCT”.

WHAT. DOES. THIS. MEAN? When Bruce Golding and Audley Shaw taxed tampons and salt, they just came out and said what the tax package meant. Although most of those measures never saw the light of day, the administration of the day said to us ‘this is what we want to do’. What are you going to be adding GCT to exactly? Who is going to pay it? What even gave you this idea in the first place? I don’t know.

The GOJ is proposing to add GCT to all fees and taxes that are payable at the ports. ALL FEES including the environmental levy, customs user fee/custom administration fee, CET, and ASD.

EL-OH-EL!

The GOJ is proposing to fix an ‘administrative anomaly’ by adding GCT to the face value of prepaid vouchers and airtime. The argument is that consumers pay the full cost including GCT for each card they buy, however, when service providers sell the vouchers and airtime in wholesale volumes it is sold at a discounted cost and the GCT is only paid on that discounted cost. Since retailers may or may not be registered taxpayers, the GOJ argues, the full GCT is not remitted to the coffers. The GOJ says the measure “SHOULD NOT” (and the emphasis is not mine) result in an additional tax liability to the consumer. This is going to yield a staggering 0.2-billion.

Wow. I don’t know how the country continued to run with this HUGE loophole in the system! Just wow. My mind has been blown. The GOJ has already deflected any blame for possible price increases to the consumer, since consumers already pay for the full cost of the GCT. But… ahm, if (and probably when) it costs more for these non-registered retailers to buy the phone cards, what do you think they will do? Absorb it like the good, loving, selfless citizens they are? I don’t know.

The GOJ wants to increase education tax by 0.5% for employers and 0.25% for employees and impose an additional 5% tax on “large unregulated companies”.

More taxes from declining (in value) salaries coupled with creative corporate taxes. At the very least, I would like to be a fly on the wall in the meeting when the GOJ needs corporate support for anything. JCDC naw do nuttin’ mo’ fi di res a year? Lisa naah kip no gala dis year? No? I don’t know.

The GOJ is introducing a new fee at the ports, a Customs Administration Fee. This “will supplant the current CUF (customs user fee) and other processing fees … which would represent a more accurate reflection of the services being offered by Jamaica Customs Department”.

Is this the CUF, only new and improved? The fee will be imposed on all imports except for those by approved charitable organisations and the bauxite sector so I would like to know what exactly it is covering that is so fiscally burdensome on Customs. The government says this is in keeping with WTO (World Trade Organisation) guidelines. Countries sign international agreements that have to result in new taxes? And even so, are we only just now realizing we made this commitment? Does Peter Phillips believe we are morons? I don’t know.

The GOJ claims it is proposing to initiate measures to increase the relatively low property tax compliance rate, reform the property tax regime, introduce “transfer pricing rules” as well as “thin capitalization rules”.

The government failed miserably at a traffic ticket amnesty. The government wants to implement all these changes in a few months, some even a few weeks. The government, failed miserably, at a traffic ticket amnesty. In the GOJ’s defence, they could have been preparing to do this for quite some time and are equipped to tackle it. Did Peter speak about the capacity of the GOJ to implement these changes?  What happens if these measures don’t yield the expected results? Is this the PNP's idea of tax reform? I don’t know.

Is Jamaica House still open?

This is the most we have heard from the Prime Minister and the Minister of Finance about the economy since... well, just since. Now I understand that Sister P is busy ‘working, working, working’— but seriously? What exactly does the Prime Minister do? I ask with no disrespect. I ask only because I do not know. The Office of the Prime Minister has a communications unit. The Prime Minister has a press secretary. The nation’s Ministry of Information is HOUSED at the Office of the Prime Minister, yet still I get the sense that very little is happening at Jamaica House. The weekly cabinet press briefing, occasional long photo captions from various ceremonies and ‘PM says to band together’ style press releases are not cutting it. The PM's few public utterances do not offer much hope either, as they are usually characterized by political bickering. Has she convinced herself she is in a dancehall clash? If you are a minister without portfolio with responsibility for a specific area… isn’t that a portfolio? Will the OPM ever stop SCREAMING in their social media updates? I don’t know.


If you have any answers feel free to let me know. I’m sure many people would like to know the answers too, as we “band together" and face the challenges we must. It's exceedingly difficult, however, to support a government that continues to be less than forthcoming with the Jamaican people and hellbent on doing whatever it wants to do anyway.

PS – Don't Parliamentarians ‘walk out’ of Parliament too often? Does the move of protest still have significance? I don’t know

Twitter: @brandonallwood

2 comments:

  1. Don't even get me STARTED on the JCD & their unscrupulous frontline employees who 'charge' weh dem feel like for you to retrieve items on top of a standard custom fee the JCD has set. HOW they are left to do this completely unregulated & unquestioned is a shocking reflection that all GO's are a law unto themselves & they do 'weh dem feel like, when dem feel like' instead of drawing up stringent policies & plans & implementing, following & regulating them (when they do, its often reactionary). Then Phillips is trying to give us the WTO spiel? Does he think we're completely retarded? I don't know.

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