Letter of the Day | Don't punish businesses with inequitable tax policy
THE EDITOR, Sir:
I would like to commend the new administration for the bold and insightful approach it has taken in crafting the 2016-17 Budget. I hope it's a clear indication of a shift towards a taxation system that has everyone contributing something, however small and by whatever means, be it via consumption or otherwise.
Previous Government of Jamaica (GOJ) tax policy characterised by a system that taxes and soaks the rich to help the poor is outmoded, as is the socialist-communist philosophy that gave credence to that approach.
The willingness of the current administration to review and hopefully adjust the current asset tax regime to make it more equitable and just is a step in the right direction, but the opportunity must also be taken at this time to look at the overall corporate tax structure with a view to giving businesses a little more space to plan and grow their enterprises.
If there is any doubt in anyone's mind about the need to ease the pressure, let's take a look at the plethora of taxes/deductions which businesses, big or small, are required to pay.
- NHT contribution
- HEART/education tax
- Contribution to NIS
- Minimum business tax
- Property tax
- Asset tax
- GCT on imports calculated at 21.50 per cent
- Customs user fee
- Annual return to Companies Office tax
- Corporate income tax
- Trade tax
We can also add the many fees and duties that businesses have to pay to government agencies daily just to be able to operate. The Tax Compliance Certificate regime also needs to be examined, as the requirements to pay the outstanding taxes are often quite burdensome, leaving some businesses in a situation where they have to close and no longer able to contribute to employment and taxes.
The State must understand that people are motivated to start and operate businesses to better their lives and their families'. Therefore, they should not be thought of as sitting ducks to be picked off at the whim and fancy of its ill-conceived ideas.
Any Government serious about growth and development must put in place the necessary enabling environment that has at its core a low corporate tax, that structure will spawn new businesses and provide employment.
The removal of stifling regulations across all GOJ entities, and a willingness to listen and be sensitive to all the issues we face in the real world, must be treated as an important step to growing the economy and building a better country.
Manor Park, St Andrew