Posted on

Taxes again – the base needs to be widened

Share

The Ministry of Finance is in the final stages of preparing the Estimates of Revenue and Expenditure and Budget for 2018. As usual, the area of greatest interest for most members of the public is how the Government intends to raise the revenue needed to fund the nation’s capital and recurrent expenditure.

For some time now, the Government has been calling on tax defaulters to pay up their taxes. Last week, the Prime Minister revealed that the Government is owed $301.8 million across all categories of taxes, including PAYE, which employers deduct from employees’ salaries. Two years ago, the Prime Minister also spoke of the large number of self-employed professionals who have not been paying their fair share of taxes.

We do not know how much progress has been made by the tax man in relation to collection of taxes from the self-employed since 2016, but it is clear that every effort needs to be made to widen the tax base and bring tax evaders under the net.

Far too much of this nation’s tax burden rests of the shoulders of salaried employees like public servants and those employed in the private sector whose PAYE is deducted at source. When one considers the significant number of self employed people who either under-report their earnings or do not report at all, one gets an idea of the magnitude of the problem.

The leakage exists not only in the areas of PAYE, VAT, licences and corporation tax, but in the heavy subsidies granted to some sectors of the public, many of which can contribute much more than they currently do.

We carry on our front page this week, a story in which fisherfolk operating from the Kingstown Fish Market have been protesting the increase in fees (taxes) imposed by the authorities. The fisherfolk are small business people, as are tailors, butchers, plumbers, gardeners, caterers, operators of cookshops, etc. All these groups of business people are expected to carry the cost of the overheads associated with doing business, as well as take into account the principles of supply and demand in order to make a profit and stay in business.

It seems that those principles do not apply to the fisherfolk at the Fish Market, where most of the overheads are carried by the Government and where the price of fish never changes, no matter how much fish is caught. From the information presented by the management of the facility, there are very few groups of workers as heavily subsidized as those who operate from the Kingstown Fish Market, and this is at the expense of other workers in the State. The fisherfolk claim that the increase in fees makes it unprofitable for them to operate, but is this really so? If so, something is very wrong with their business model.

Everyone, big or small, needs to pay his/her fair share of taxes. There are too many needs in the country which are yet to be met.

LAST NEWS