Garth Rattray | Truly widen the tax net
There’s always talk about widening the tax net. However, the tax net is repeatedly strengthened and not truly widened. The authorities assume that itinerant workers, tradesmen and micro business people earn such intermittent and paltry sums that they can’t pay any income taxes whatsoever. Yet, whenever I seek the services of skilled or semi-skilled workmen, the salary that I pay them often rivals my day’s earnings.
I have a friend who decided to construct a place to retire if and when he was able to do so. After saving for 37 years, every time that he transferred monies to the ‘contractor’s’ account, the transaction was scrutinised. He was always quizzed about why he’s transferring the money (to a different branch of the same bank) and government documents were always signed and double-signed before being sent off.
It, therefore, surprised him to learn that when the contractor went to pick up the monies, there were no questions and no scrutiny.
Because of this disparity, my friend asked the contractor if he paid income taxes, but he confessed, “De tax ting ah no supp’n me do.” Earnings from that construction alone allowed the contractor to change his vehicle, buy land, construct the ground floor of a proposed two-storey dwelling and put his daughter in a private school.
We need to register all workers for several reasons.
1. To provide some sort of ID confirming/authenticating their profession/occupation.
2. To establish their level of training/
skill and competence.
3. To register them for censuses, tracking and tax purposes.
Many unlicensed electricians lie about their qualification. This may only become evident if they mess up your home/business or if they tell you that a friend has to submit the electrical plan on their behalf. Plumbers are also guilty of falsely representing their proficiency. There ought to be trade licences issued based on proof of certification from approved training institutions or after relevant exams (like a driver’s licence).
Unlicensed tradesmen should also be registered and can still be gainfully employed, but their documented qualifications will guide employers as to what is to be expected from them and how much they can command for services.
The labour expenses on a building can outpace the cost of materials. People constructing homes and businesses pay taxes on their earnings, on their savings and on the materials, but I don’t know any skilled, semi-skilled and unskilled labourers who pay income taxes. Mandatory registration allows the Government to realise some income from these workers. Although many work intermittently, they earn enough to carry them on during dry spells. Even if they pay a little, they should pay some income taxes.
SENSE OF AWARENESS
Not only will this truly widen the tax net, it will give all citizens a sense of responsibility and an awareness that they have invested in the country. They will know that when there’s wasting of our precious economic resources with violence, unnecessary crashes, damage to public property, littering and whatever else, it costs each and every taxpayer.
The same should go for owners of all small (even single-proprietor) businesses. No one wants to crucify them but, if they pay something, there will be a positive cumulative effect on our economy and a sense of participation in running the country. When people begin to realise that it’s their hard-earned money that helps to pay for everything, they will exercise more discipline over their day-to-day actions.
Additionally, permits should be required for all additions and alterations, even minor ones. These will lead to a steady trickle of income for the State and maintain adherence to covenants, zoning and rules laid down by individual housing developments. The only real drawback could occur if the Government makes this simple task expensive, dragged out and complicated.
Aside from the truly destitute or poverty-stricken, everyone earning a livelihood should contribute something through income tax payments, no matter how small. Until and unless governing administrations stop fretting about upsetting their grass-roots voter base and instil properly monitored regulations, the economic burden will always be borne by the usual suspects and the crushing weight of the taxes will eventually retard and even halt entrepreneurship, production and growth.