Linton Gordon
The Jamaica Labour Party (JLP) Administration through Minister of Finance Audley Shaw has now announced the long awaited Tax Relief for persons earning One Million Five Hundred Thousand Dollars ($1,500,000.000) and less.
The first thing to note is that the Jamaica Labour Party (JLP) has not kept its promise of a Tax Relief being effective as of the 1st of April, 2016. During the campaign when a number of persons stated that it could not be done Mr. Shaw strongly and arrogantly declared that he had worked the figures and his experts had looked at the figures and they were absolutely confident that it could be done.
Mr. Shaw went on to give unconditional and unqualified assurances that as of the 1st of April, 2016 persons earning One Million Five Hundred Thousand Dollars ($1,500,000.00) and less would not pay any taxes. There was the further assurance that some persons in this category would end up having an additional sum of Eighteen Thousand Dollars ($18,000.00) per month “in yu pocket” by virtue of this Tax Relief.
We were also assured most emphatically by Mr. Shaw that there would be no new Taxes imposed in order to accommodate the tax relief to persons earning up to One Million Five Hundred Thousand ($1,500,000.00). We now all know that these several promises made during the election campaign have either been breached partly or substantively. In the first place no one has been granted Tax Relief on earnings of up to One Million Five Hundred Thousand Dollars ($1,500,000.00) as of the 1st of April, 2016. That promised has been breached One Hundred percent (100%). Instead Tax relief has been given to persons earning up to One Million Dollars ($1,000,000.00) as of the 1st of July, 2016.
Mr. Shaw further announced that Tax Relief to persons earning One Million Five Hundred Thousand Dollars ($1,500,000.00) and less will be fazed over a period up to April, 2017.
The promise of no new taxes has not been kept. A number of additional taxes have been announced and two of these require immediate attention. The first one is the tax on the fuel used to generate electricity. No matter how the Government tries to explain this they cannot escape admitting that this tax is bound to cause an increase in electricity.
One does not have to be a tax expert to know that just about every good and service we use is affected in one way or another by electricity. Whether it is a patty, a bulla cake, professional services or the production of toothpaste or the operation of a supermarket, electricity is consumed by these activities and if the electricity goes up then it is likely that the cost of these goods and services will also go up.
TAXING POOR
The increased cost will affect persons who before the announcement were not paying PAYE tax. To this extent, the Government has imposed a tax on the lower income persons in order to give relief to persons earning up to One Hundred & Twenty Five Thousand Dollars ($125,000.00) per month!! A similar consequence will flow from the increased tax on Petroleum. Transportation affects the conveyance and distribution of goods.
The movement of every citizen, be they children going to school or workers travelling to and from their jobs will see increase in fares. Already members of the transport sector are demanding increases in fares. The Government will be hard pressed to resist these demands given that they have increased the cost of fuel by the new tax.
Again the increase in electricity supply and transportation will be a heavier burden on the lower income sector than it will be on those in the upper income sector. The conclusion therefore, is inescapable, that Mr Shaw has given relief to a higher income category and is collecting the deficit from the lower income category. The Tax measure announced are ill advised.
POLITICAL PROMISES
It would be better if Mr Shaw had stopped at the point where in his presentation he signalled that having come to office, the money for the One Million Five Hundred Thousand Dollars ($1,500,000.00) Tax Relief was not where he thought it was. He should at that stage tender an apology, beg the country for forgiveness and move on without crafting the new tax policies he has presented. There is however a bigger issue we must face and it is this: Are we seeing an instance of politicians deliberately misleading electorates in order to get their votes.
Have the Jamaican people been scammed into voting for benefits that were “pie in the sky” the way the several Ponzi schemes tricked people into believing that they could get money by some miraculous means.
We should never retreat from questioning the truthfulness, the integrity, and honesty of persons who put themselves forward to govern us and to control the affairs of our country.
