Sun | Aug 20, 2017

Letter of the day: Taxes sucking life from businesses

Published:Thursday | June 4, 2015 | 6:00 AM

THE EDITOR, Sir:

Doing business today in Jamaica is a challenge. It is made even more challenging when one tries to become tax compliant. Each month, you have general consumption tax (GCT) and statutory returns to file and pay. Each quarter, you have estimated taxes due. Income tax and asset taxes are due each year. There is also the minimum business tax that is due biannually. Effective June 1, a new tax, the environment levy, was introduced; this is payable each quarter going forward. All these taxes are required to be paid in order for one to get a tax compliance certificate (TCC). Without the TCC, one would not be able to conduct or engage in any business activity. Even banks are now requesting TCCs. Getting a TCC is a tedious process and one that has to be repeated every six months.

I do not have a problem with the payment of taxes, but when you have so many multiple taxes with different due dates, it makes the cost of doing business more expensive.

The GCT is an equitable tax. However, I think it should be payable after you collect it. I have had numerous cases where GCT had to be paid over even before collecting the payment on the invoice. This creates a serious strain on your cash flow, especially on small companies like mine.

 

generate revenue for growth

 

This new Environment Levy Tax, though small, will still add costs to production. We need to find ways to generate more revenue and not simply collect more revenue by taxation. My concern is that, in a time where we should be encouraging growth, we are doing the opposite with the imposition of additional tax burdens on the business sector.

We need a growth agenda, pronto. Passing the International Monetary Fund (IMF) test each quarter is not enough. What if the price of oil did not fall? Would we still have passed these tests? What is the plan post IMF? Both political parties need to bring their brightest minds together to formulate a growth agenda identifying the key areas. It cannot be accomplished by a chosen few. No one person or persons is the repository of all knowledge. We have to put our country first. United we stand, divided we fall.

Andrew Gray

Gray's Pepper