My two cents on a workable Budget
Claude B. Manning, Contributor
Here is my list of suggestions regarding the current Budget package, but first, quick summaries of two stories from my childhood days.
1 A young boy hears a crash and, upon investigation, discovers that a truck had got stuck under a low bridge. Suggestions from onlookers centred on the engineering challenges of dismantling either the bridge or the truck. The boy's solution? Let most of the air out of the tyres and thereby lower the truck's height.
2 A drunk happens upon a group of passers-by trying to assist a motorist. In the process of changing a flat tyre, the latter had inadvertently knocked the lug nuts down a drain. Suggestions included attaching a piece of hose to the exhaust pipe to use as a pneumatic jack that would keep that corner of the car off the ground while driving. The drunk's solution? Take a nut each from the other three wheels for use on the affected wheel.
I start with these stories to ward off possible rebuttals from our plethora of economists and would-be economists who are always armed with arguments why ideas won't work but have yet to come up with viable solutions. Here then are my suggestions:
1 Keep the GCT on residential electricity with the threshold at 300kWh. Any household that uses more than that should be willing to either pay the tax or practise energy conservation. I believe most of those who exceed this figure are running commercial operations in residential areas, which in itself is illegal. Remove all duties and taxes from residential-size solar-powered devices and convertors (residential size would be determined by ability to deliver 300-500 kWh/month) to encourage adoption.
2 Institute a similar tax-free threshold for the manufacturing sector for a limited period, perhaps two to three years, and simultaneously remove all duties and taxes from alternative-powered equipment and energy-conversion devices, for the same period, as an incentive to get companies to spend money to diversify energy sources.
3 I do not support the calls to get out of CARICOM, but think a special fuel-parity cess should be levied on all products imported from Trinidad and Tobago to counter the special concessions their manufacturers enjoy on energy. I would support 20-25 per cent.
4 There have been reports of 'rules of origin' violations by T&T involving the relabelling of goods made in other countries as 'Made in Trinidad'. Customs should verify origins of T&T goods and charge a five per cent fee for this service. Typical processing time should be two to six weeks after cargo lands here, but importers would have the option of waiving this verification process by paying a 15 per cent certification fee.
5 T&T companies with manufacturing operations in Jamaica should be able to import FROM T&T goods equivalent to a maximum of 150 per cent of their total exports TO T&T, under normal CARICOM rules.
6 Remove GCT from ALL printed material with non-adult content.
7 Move the minimum wage to $7,000/week and simultaneously move the tax-free threshold so that the PAYE relief is equivalent to 50 per cent of the minimum wage. That means that the threshold would be (($7,000/wk x 52wks x 50%)/25%) or $728,000 p.a.
8 Stagger the corporate tax rate to vary based on number of permanent employees (minimum six months' tenure). More than 500 employees - 20%; 201-500 employees - 25%; 51-200 employees - 27%, 16-50 employees - 30%, 10-15 employees - 31.5%, less than 10 employees - 33%. This would encourage the hiring of staff, thereby creating jobs.
9 Review the motor-car licensing rate to make it dependent on capacity-to-weight ratio (cwr), rather than on straight cubic capacity (see table below. Figures are percentage movement vs the May 31, 2012 cost). This will encourage the purchase of more fuel-efficient vehicles. The long-term savings from points 1, 2 and 8 would be of great benefit in reducing our oil bill.
If someone could take the time to calculate the financial impact of the proposed measures on the Budget, we may be surprised to see that we are able to pay our bills while fostering development, and with far less pain.
|% Change vs Old Rate||-25%||0%||+50%||+100%|
|Up to Half-Ton Unladen Wt. (UW)||Less than 1,000cc||Less than 1500cc||Less than 2000 cc||2000+ cc|
|Up to 1 Ton UW||Less than 1,500cc||Less than 2,000cc||Less than 2,600cc||2600+cc|
|Up to 2-Ton UW||N/A||Less than 2,600cc||Less than 3,500cc||3,500+cc|
|Over 2-Ton UW||N/A||N/A||Less than 3,500cc||3,500+cc|