Sat | Aug 19, 2017

Devon Dick | Taxes unfair to transport sector

Published:Thursday | March 16, 2017 | 3:00 AM

Today, motorists who use unleaded 87 and 90 gasolene will pay $5.67 more per litre and those who use diesel will pay $6.70 more per litre which is approximately $30 and $50 more per gallon, respectively.

However, in a post-budget interview, a government spokesman said he did not expect an increase in transportation cost to the public. How does one take this comment? Last year, persons in the private transportation sector absorbed the increase. However, it is unfair for that sector to have to apply for a bus fare increase and not have the power to increase and allow the market to determine the price, while other private-sector producers of goods and services are not similarly restricted.

The Private Sector of Jamaica (PSOJ) said that there should be no regulation on bank fees but, instead, allow the market to determine the fees. So why can't the transport sector be treated in a similar manner. Producers of basic food items necessary for substance and sustenance have no price controls. They determine the price based on cost of inputs and the market, so what is good for the goose should be good for the transport operators. It would make more sense to have price control on basic food items and not on transportation.

Is it because the transport sector is not managed by the upper classes why they have to apply for a fare increase? The sector having to apply for a fare increase is not fair.

It is one thing for the public transportation system to absorb these increases and use the dominant position to keep fares low. However, to determine the increase in inputs and then have the power to say no to an increase in the charge for the related service provided by the operators is unjust because the government has a conflict of interest, and is playing the role of judge, jury and executioner.

Furthermore, the public transportation system has large debts and based on that track record, the government should not be one to make business decisions for the operators of the public passenger transportation system.

It is unrealistic to expect such significant increases not to lead to adjustments in fares. It means that taxpayers will have to 'hug up' the increased costs for public transportation. And in the case of non-government transport sector, it is going to facilitate rogues who will engage in illegal and/or immoral activities to make the business viable.

 

NEW THINKING

 

There needs to be a new thinking in the taxation policy and realise that it affects the lower classes disproportionately. In other words, the gas increases will not affect those persons who have fully maintained vehicles, and the tax on health insurance will not affect those who get the benefit 100 per cent paid for. The others will have to suck salt through wooden spoon.

The budget, as tabled, is for the fiscal year April 2017 to March 2018. Then how come the imposition of some taxes takes effect in March 2017? This seems to mean that consumers will be double taxed in March.

Unfairness is also seen in the tax-relief policy. The original promise was to give a tax relief without adding new taxes. So to give a $10-billion relief and impose $11 billion in new taxes to cover it largely defeats the purpose and would take no genius to do that. But in our case, the rationale has changed to shifting taxes to consumption and not as one earns. Again, it will affect the persons at the lower end in a worse way because they were not paying any income tax in the first place, and now they have to help foot the bill for the middle-class tax exemption. Every weh dem tun, macka juk dem now.

By the way, it can cost US$429 to get a two-year British visitor's visa. We could implement a similar visa system and then we will not have to tax the overburdened taxpayers and put so much taxes on those who can least afford it.

- Rev Devon Dick is pastor of the Boulevard Baptist Church in St Andrew. He is author of 'The Cross and the Machete', and 'Rebellion to Riot'. Send feedback to columns@ gleanerjm.com.