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Businesses being harassed for tax, says Andrew Holness

Published:Friday | March 20, 2015 | 3:00 AMDaraine Luton
Opposition leader Andrew Holness, making his contribution to the Budget debate in Parliament on Wednesday.

Opposition Leader Andrew Holness, yesterday, said the Government was harassing taxpayers in the business community under the guise of doing compliance activities.

Some $12.3 billion has been targeted for collection by way of compliance measures to help finance the 2015-2016 budget. This is in addition to $10.4 billion in new taxes announced by finance minister Dr Peter Phillips when he opened the Budget Debate last week.

But Holness, in making his contribution to the debate, charged that the Government is not serious about tax reform, arguing that its strategy of tax collection appears to be going back to businesses which have been paying taxes, for more money.

"Let me make it absolutely clear. We, on this side, believe that people should pay their taxes; people should comply with the law of the land and pay their taxes. But we believe that if you pay your taxes, you should not be harassed for more taxes, and that is what many people in the business community feel - that people who pay their taxes are the ones who are going to get harassed again for more taxes," Holness said.

"The compliance strategy is not about so much the expansion of the tax net. Too much work (is required) to get new people into the tax net. Let us focus on the ones we have already. That is not a fair tax reform. Tax reform should be that if you pay your taxes and you are productive, then you should benefit from tax relief," he added.

William Mahfood, president of the Private Sector Organisation of Jamaica, told The Gleaner that the fear of harassment was not one that existed within his organisation.

"I have not heard of any harassment. There have been one or two instances where businesses have had difficult challenges from the tax authorities, but typically, the tax authorities tend to be very professional," Mahfood said.

"The Government needs to look at the opportunity to flatten the tax rate across the board and widening the base," Mahfood said, while adding that once that is done, it will improve tax compliance and stimulate economic activity and growth.

Meanwhile, the Opposition leader blamed the low growth in the economy on the fact that $52 billion in new taxes have been imposed on Jamaicans in the three years that the People's National Party has been in power.

He noted that $19.4 billion in new taxes were imposed in 2012, another $15.9 in 2013, some $6.7 billion in 2014 and $10.4 is being programmed for next fiscal year.

"The Government is literally going into your pocket and taking out your money," Holness said.

He has warned Jamaicans to be on standby for new taxes, suggesting that if the $12 billion cannot be collected through compliance, Phillips may not hesitate to impose greater burden on taxpayers.

"The minister doesn't want to see you have any money in your pocket," Holness charged. He said that while taxes were inevitable, Jamaica had reached its taxable limit.

"The bucket has dropped out. Going down the road is an anti-growth strategy," he said.

Arguing that the Government has been failing to manage the economy, Holness brought three basket of food items to Parliament, illustrating the extent to which the purchasing power of the Jamaican consumer has been eroded over the past three years of the PNP's reign.

"The impoverishment of our people has gotten worse since 2011. People are no longer talking about oxtail and curried goat. As a matter of fact, chicken back is now priced way above the means of many Jamaicans," Holness claimed.

He said poor Jamaicans were now turning to fish back as their source of protein. The product, he said, is imported and sold in many inner-city communities. However, Government MPs claimed ignorance, some even claimed that Holness was making up stories.

Damion Crawford, MP for East Rural St Andrew, described Holness' fish-back statement as "a lie from the bottom of the pit of hell".