Wanted: taxation committee

The time has come for the establishment of a taxation committee of Parliament. We would even be prepared to support any move to have such a committee meet in camera, so as not to compromise the Government's ability to collect revenue.

This tax committee has become even more necessary because Audley Shaw and his technocrats appear to be struggling to formulate sensible and workable tax policies. Just last week, the minister turned up in Parliament to announce a readjustment of some of the measures he announced and attempted to justify one week earlier.

We have heard that Shaw is unhappy with the new measures, which see the Government bowing to the demands of the tourism sector and spirit giant J. Wray & Nephew. We have also heard that the readjustment is the dictate of Prime Minister Bruce Golding. If these two reports are true, it is even more reason to have a tax committee recommend to the minister a tax mix that would have a wider buy-in among the legislators and their constituents.

Hole in the budget

Audley the Grinch's decision to impose new taxes is most unfortunate but, given the fallacy on which his initial projections were built, the move is not surprising. He failed to recognise that a contracting economy that has lost more than 10,000 jobs means less general consumption tax and less collectable PAYE are reflected in his projections this year. And, if that were not enough, he projected a huge chunk of tax collection on increased compliance. We wonder what would be the country's position today had Customs not been collecting more revenue than was budgeted? Let us remember that revenue was running $3.7 billion below projection at the end of October.

As if he has learnt nothing from his many follies, Shaw, in his latest about turn, has left a $100-million hole in the budget which, he says, he would be seeking to plug through increased compliance. We find this laughable. Both Jamaica Customs and the Tax Admin-istration Services Department (TASD) already have broken baskets carrying water. Commissioner of Customs Danville Walker has complained that his department is not able to operate efficiently because of a lack of government support.

The director general of the TASD, Viralee Latibeaudiere, has also told Parliament that attempts by her department to collect revenue are being undermined by the State's refusal to provide it with the requisite tools.

Lack of funding

Walker said Customs asked for $3.2 billion to do its work this fiscal year and it was only granted $2.4 billion. He said his department requires $224.8 million to buy capital goods, but was only provided with $58 million. Latibeaudiere has told Parliament's Public Administration and Approp-riations Committee (PAAC) that the lack of resources has put her department "under severe stress". She told the committee that no money was provided in the last budget for the purchase of computers or other equipment, or to pay additional cashiers to collect revenue on behalf of the State. She also said the agency was not given enough money to do repairs to its computer system, so there is "a compromise".

What is interesting is that there has been no provision in the supplementary budget for these agencies to get more resources to collect more money for the Government, yet Shaw says they should go and fetch another $100 million. That is madness!

Without a doubt, a tax committee of Parliament, which relies on the PAAC, would help in not only solving the problem of revenue policies but would ensure that those revenues identified by the Government are collectable. The committee could be set up in such a way that it does not infringe on the power of the minister of the Cabinet to make taxation policies. And certainly, based on Shaw's track record in this area, we do not believe he should object to getting help and guidance in revenue collection.

In the meantime, we humbly suggest to Shaw that he expedite that framework for collecting a flat income tax from certain income and employment groups. He also needs to go straight to those persons who earn income and continue to be outside the tax net. It is our suggestion that the following groups be targeted forthwith.

Teachers who offer Grade Six Achievement Test (GSAT) extra lessons: They make a killing from extra-lessons and Saturday lessons payments. They should pay their fair share; and they should not cry because many of them are tardy in executing the syllabus during normal school hours, thereby guaranteeing themselves massive bonuses.

Similarly, businessmen - small, medium or large; entertainers and sportsmen, speechwriters and advisers to politicians, freelance journalists, lawyers and doctors as well as public-transport owners within arm's length of the taxman and should be grabbed immediately.

We also suggest that before the next fiscal year, the ministry should develop that flat-tax which would nab vendors, taxi drivers, conductors, bus drivers, carpenters, gardeners, hairdressers, barbers and all those persons who use and refuse to pay their fair share for the services paid for by the man currently being strangled by the tax net.

In the meantime, we suggest Shaw be sent to study taxation 101, because his frequent blunders in this area makes the country look juvenile.

thegavel@gleanerjm.com