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Letter of the Day: Are banks collecting taxes for State?

Published:Monday | June 15, 2015 | 6:06 AMWinston Barrett

 

THE EDITOR, Sir:

Andrew Gray's Letter of the Day ('Taxes sucking life from businesses'), published in The Gleaner on June 4, 2015, is a timely reminder of how successive governments have taxed the business sector to its current state of near extinction.

If you are an importer of anything in this country, be it capital goods or consumer goods, the taxes start at the port. You are required to pay GCT, grossed up to 25 per cent, long before anything is consumed from your shipment. Please note that the GCT is supposed to be a consumption tax.

Then you have to pay a raft of other levies and taxes, namely: CAF, CUF, environmental tax, customs duties if your import is not exempt, plus an annual fee authorising a broker to clear your goods, and if you clear your goods yourself, you still have to pay for the privilege of so doing.

Assuming that you manage to finally take possession of your goods and remain in business, the orgy of taxes continues, and it goes something like this: HEART, NIS, PAYE, education tax, asset tax, semi-annual business tax and company profit tax.

But even before you can begin the process of importation, you need a Tax Compliance Certificate (TCC), which must show a clean bill of tax health, with respect to all the possible taxes payable. In the past, you could get a loan from the bank to help meet these payments, but now, under what is clearly an arrangement between the Government and the banks, the latter are now demanding a TCC before you can get a loan.

Speculation is rife in the business community that the banks have added tax collection to its portfolio of services as a deal to ensure that banks will never have to take another hit like the debt exchanges they sustained in 2009 and 2013.

If this arrangement has been made, the Government and the banks must come out and say so.

All the above smacks of short-sightedness by the Government for creating a climate in which business cannot borrow, such that lending to SMEs is down, no growth is taking place, unemployment is up, and the economy grinds slowly to a halt.

WINSTON BARRETT

winstonbarrett1654@gmail.com