THE latest tax that has been delayed is the 15 per cent measure, on the winners of the various lotteries. This seems to be par for the course, with the Finance Ministry still trying to sort out what it imposed in April of this year. We are already past the first quarter (April-June) of fiscal year 2003, and well into the second quarter and we still do not have the final picture as it regards the applicable taxes (new ones that is) which were imposed in April.
The country knew that it was going to receive the largest tax package in its history long before it hit us. If the officials at the Finance Ministry did not know then they should have had an inkling, when the Minister of Finance made his intemperate remarks on the size of the fiscal deficit. The government then spent expensive dollars in retreats with its own officers, consultants and Ministers as well as with PSOJ officials to look at ways to meet these fiscal problems. It has employed two Ministers of State in the Finance Ministry and yet what we have had, in the way of new taxes emerging from the budget presentations, is the sort of amateur gibberish that should not be tolerated.
CLEAR CANONS
There are several clear canons of what a good tax should entail. This can be broken down to four simple guides. One, it should be as simple and easy to calculate as possible, that it can be worked out by all taxpayers, hopefully without tax consultants and accountants in tow (to know what exemptions occur or where rebates are given). Two, it must be easy to collect and administer so that the government tax authorities don't spend more in administrative costs and insignificant fines, than what the tax brings in. Third, the tax burden should be spread as widely as possible so that no single group or individual feels unduly targeted, so as to avoid the burden being carried by a few persons or groups. Fourth, taxes should be as equally imposed on persons of equal income standing as is possible, and given recent progressive trends, take a higher proportion from the rich than the poor, at least when it comes to direct taxes.
Instead, what we have had is successful repeals on ill-conceived taxes, ranging from taxes on medicines, surgical supplies, book industry and numerous others. We have had a successful repeal of the tax from a gambling body (the horse racing industry) and an unsuccessful attempt from the other gambling body (Supreme Ventures), which perhaps did not get this repeal because it would have hamstrung future tax charges (i.e. the caveats were too high to be accepted). We have had magazines uncollected in post offices, because those who decided to impose these new taxes were not aware that the charges on these magazines would sometimes surpass the cost of the magazines themselves. We have had a fall-out within the PSOJ and its manufacturers because its main groups decided that a difficult to-be-imposed reimbursable cess was not preferable to an outright import surcharge.
At the end of the day what seems to be happening is someone in the Finance Ministry is playing fiscal jigsaw with the country, without realising that it's not a play game but people that will be affected in the end. Is there anyone in the Ministry that today knows the rates of existing and new charges and which items it applies to and which ones are exempt? I believe that not even the Minister of Finance can't answer that one!
