Sun | Feb 18, 2018

Robin Hood approach to governance

Published:Saturday | May 14, 2016 | 12:00 AM


This is a response to the lead story in The Gleaner on May 13, 2016, titled 'Tax break for all - No PAYE worker to be excluded from $1.5-million relief plan - Shaw'.

When Prime Minister Andrew Holiness built his campaign on the $1.5-million promise, like many, I was sceptical. Knowing that taxes are the Government's main source of revenue, I concluded that if the Government were to reduce taxes on income, for even 1/10th of a per cent of the population, it would need to increase taxes elsewhere.

To probe my position, I reviewed the Jamaica Labour Party manifesto TWICE and, astonishingly, funding for the PAYE promise would not come from increased taxes, but from other sources, such as an increase in collection of arrears and GCT charged on the new spending that will result from higher income.

Imagine my shock and the shock of thousands of Jamaicans when Minister of Finance and Public Service Audley Shaw announced the party's intention to increase taxes to fund a promise that should have never been made. Then, to add injury to insult, the Government will increase taxes on one of the most essential and intertwined entities of the Jamaican economy - petrol.

Most businesses operate for profit, so when operating costs increase, cost of goods and services will also go up. Increasing the special consumption tax on gas means that your monthly bill from the Jamaica Public Service is going to rise; taxi fares will increase; the prices of goods manufactured in Jamaica will spike.

So, although SOME Jamaicans are going to be taking home more, they will be spending more. They won't be buying land and they won't be building a house because the cost of living will increase with a rise in taxes.

I cannot, in all honesty or fairness, accept the plan that the Government has presented. It is a Robin Hood approach to governance.

If this plan is implemented as is, not only should we expect to see a sudden spike in the cost of goods and services, but the Government should anticipate more people reporting smaller earnings to avoid increased tax penalties and to benefit from the proposed ones.