Gordon Robinson | Direct indirect taxation
On Sunday, I exploded the myth that Government's massive tax hikes imposed on the poor and vulnerable in 2016 and 2017 were driven by a policy shift to 'indirect' taxation.
Indirect, schmindirect! GCT on petrol is paid by every Jamaican, whether or not he/she owns a car. GCT on residential electricity, plus SCT on kerosene oil, is open warfare on fixed-income earners and a breach of trust by Government who promised a "revenue-neutral" tax break to win an election. GCT should be paid from disposable income. If not, the philosophical foundation of every value-added tax, namely, taxpayer equity, is destroyed.
It's worse. The devil is in the details. Government's obsession with administrative complexity moved it to impose staggered rates of GCT on telecoms. This prevents taxpayers, when making GCT returns, from easily calculating their input taxes for set-off against output taxes collected. Then, exposing a seemingly insatiable appetite for harassing persons already complying because they're low-hanging fruit, Government insists on calculating taxpayers' input tax payments on telecoms at 16.5% across the board.
This unfairly reduces taxpayers' legal set-offs and forces them to pay, as 'arrears', more GCT than the actual net tax collected. Never satisfied, Government then charges interest and penalty on these 'arrears'. The result? Improved tax revenues, allowing Audley 'Are You' Shaw to revel in the optics and boast insufferably.
While this conscienceless contradiction is perpetrated on honest taxpayers, GCT paid out of disposable income by those able to afford restaurant fare leaks from the revenue in torrents. Some restaurants deliberately rob customers and defraud the revenue with bold, unpunished strategies based on 'GCT'. Many have the gall to charge customers a compulsory service charge; then ask if the tip should go on the credit card; AND then charge GCT on the service charge. This provides a surplus the business needn't pay to Government because GCT isn't payable on service charge, only on service.
One popular restaurant goes even further. As a rule, restaurants don't seem to appreciate the simple principle that the bill belongs to the customer, NOT to the restaurant, which should keep what used to be called a carbon copy for its records. This unnamed (for now) restaurant doesn't even provide customers with a copy bill unless the customer specifically asks for it and then a separate original is delivered with only "lunch" written on it. WTH?
One day, my instructing attorney and I stopped there for lunch. After I paid the bill, the credit card receipt was returned to me with the original bill still attached. So, before the 'error' could be discovered, I quickly secured it and we hustled out. After she drove out of the establishment on to the main road, I looked around and was shocked by what I saw.
"Well it mus' be a duppy or a
I man no find out yet.
I an' I so frighten
all di dawta name I figet."
It turned out to be the 320lb waiter, knees up, belly down, doing his best Usain Bolt impersonation trying to catch the car. We allowed sympathy (it was restaurant policy, not HIS fault) to overrule principle, stopped and returned the original bill to the panting waiter who, otherwise, might've lost his job.
This is where Government can find significant revenue leaks requiring urgent plugging, NOT from hard-working Jamaicans trying to pay their fair share.
Recently, Glenroy Anthony Michael Archangelo Smith ('Ernie') celebrated 50 years in music. I remember when his first recording I Can't Take It (subsequently covered by Johnny Nash as Tears on my Pillow, which caused enough confusion with the Imperials' song of the same name to delay Ernie's royalty receipts) was released in 1967. Country music was huge in Jamaica then and Ernie only wanted to be a country/western singer, hence his first album included Kris Kristofferson's seminal composition Sunday Morning Coming Down.
Peace and love.
- Gordon Robinson is an attorney-at-law. Email feedback to firstname.lastname@example.org.