Tax dodgers helping to keep income tax high – Shaw

[Lazie]

Finance Minister Audley Shaw says tax dodgers are making it difficult for the Government to lower income tax.

Mr. Shaw says his Ministry estimates that about 200,000 companies and individuals are still outside the tax net.

He says because of the high number, the Government cannot at this time reduce income tax and provide relief for persons on the tax roll.

"If those 200,000 people were to start paying income tax, I could immediately reduce the income tax rate from 25% to 20 or 15%. What we want to instill in every Jamaican is a healthy respect for paying their share of the taxes." Mr. Shaw said.

[Lazie]

How difficult is it to start an exercise of finding out which businesses are not paying their taxes? Every business should have a Tax ID (or is it TRN?) and businesses that cannot produce one should face some santions as well as put in the system.

Targeting individuals is another thing.

[Islandman]

Or maybe find other ways to widen the tax net instead of using the PAYE tax system.

ie Increase GCT, increase higher govt license/registration fees, etc etc.

[Hortical]

Kiss teeth...nuff bizness pay taxes to the (JLP/PNP) Dons instead paying money to Inland Revenue.

[Lazie]

Kiss teeth...nuff bizness pay taxes to the (JLP/PNP) Dons instead paying money to Inland Revenue.

Well, that needs to be addressed as well.

[Hortical]

Well, that needs to be addressed as well.

Yuh really have the appetite fi the Dons to tun Kingston into another Juarez?
Mek nuh bones bout it, dem would a fight back with a vengeance if the Gov't try fi cut off dem food.

[Lazie]

Yuh really have the appetite fi the Dons to tun Kingston into another Juarez?
Mek nuh bones bout it, dem would a fight back with a vengeance if the Gov't try fi cut off dem food.

Well, its the gov't responsiblity to provide security for its citizens. Time fi people either get on the bus or get run over by the bus .. dem coulda name Don or Donnette.

[Lazie]

Or maybe find other ways to widen the tax net instead of using the PAYE tax system.

ie Increase GCT, increase higher govt license/registration fees, etc etc.

Islandman, increase GCT to about what? I've heard that talk before, not too certain I'm for it. I'm willing to hear more about it though.

[Islandman]

I would only be able to guess a figure, but there must be models that can estimate what increase it would take to offset a reduction of the income tax.

GCT is only an example, but the general idea is to widen the tax net to include the people who are able to avoid paying income tax. Enforcement of income tax payment is costly and difficult in countries like JA where so much of the economy is informal and cash-based.

Wether the best way to do that is higher sales tax, road tolls, higher fees for govt services, property taxes, or whatever combination of those that works, is something that would have to be figured out and adjusted as necessary.

[Assasin]

Raising the GCT and dropping income tax mean everybody who pay. A lot of money come in by remmittance and the people who collect it, while living a good lifestyle pay little taxes. So many vendors, barbers, taxi drivers and small business are not even registerd and pay no taxes. Government entities are not even paying their taxes.

Drop the income tax and therefore less resourses needed to take people to court, simple way of paying taxes and people decide if they want to save or spend their money. I am all for it because the tax base in Ja is very limited.

[Exile]

Protectionism, double standards and abject hypocrisy...the name of the game...too long working class citizens have been carrying the brunt of the tax burden...but then sm argue, they are businessmen..above the law...also include lawyers, doctors, engineers.. name it....

[Karl]

Where is the article with claims of a budget shortfall?


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SHOW ME THE MONEY - Government faces a $29b budget shortfall

Published: Sunday | April 5, 2009



Finance Minister Audley Shaw
Arthur Hall, Senior Staff Reporter DAYS BEFORE the Government presents the 2009-2010 Estimates of Expenditure, there is no final word on how the administration will finance an expected $29 billion increase in the public sector wage bill.

SHOW ME THE MONEY - Government faces a $29b budget shortfall

[Peter R]

Raising the GCT only places a higher tax burden on the END-consumer. A raising of the for GCT for GCT-registered businesses will be tax neutral as the GCT paid on purchases (goods for resale or anything consumed by the business) is refundable to the businessman/woman. The non-registered businesses will pay more on their purchases yes, but that will be offset on the GCT that they will build into their selling price (while not remitting it).

The challenge really is to make the tax-collection process more efficient while publicising the punitive measures applied to tax EVADERS.

[Peter R]

What you are advocating is probably a straight consumption sales tax that is non-refundable to anyone. In that case the GCT should be lowered so the end consumer (especially the little man) wouldn't get hurt. However, it means another layer of taxation and tax-collecting to stress Inland Revenue.

This is similar to what exisits in Ontario Canada for example where there are two sales taxes... GST (like the GCT or VAT) and a Provincial sales tax.

[Hortical]

Much better tax collection is needed, and significant amounts of dollars are paid to politically connected criminal organizations. A dis a di elephant in the room.