Dear Editor,
The tax measures announced by Dr Peter Phillips, the minister of finance, have attracted widespread opposition. Minister Phillips announced that there would be a tax on withdrawals from deposit accounts by whatever means including by point of sale/ATM withdrawals and intra-account transfers in the banking sector.
The percentage and the consequent amount imposed is not large. However, it appears that the objections are based on principles with which most of us can sympathise. It was the PNP administration of the 1970s that imposed a tax on the interest earned on our deposits in banks. Currently, that tax is 25 per cent of all interest that we are paid on our savings in banks.
This tax survived the administration of the JLP which was in power from 1980 to 1989. It has continued since and has now become a fixed tax liability to all savers. It should be noted, though, that the Government’s recent announcement is that the tax will be paid by the banks and not by the customers.
However, the public is sceptical of this and believe that the banks will find a way to pass on this cost to their customers, thus increasing the percentage of our savings and interest being snatched from us.
One has to concede that the Government, operating under the strictures of the IMF, is obliged to find a source to fill a gap of almost $2.2 billion in the budget. No doubt Dr Phillips and his team must have looked at all arrears, and having concluded that everywhere else is overtaxed, they zeroed in on our bank accounts.
The harsh reality is that the country has, for years, been spending more than it earns. I share the view that successive Governments continue to demand more and more from “those dem can catch” — the taxpayers. The majority of taxpayers who make their returns and pay their taxes are constantly harassed by the Government to pay even more taxes and penalties.
On the other hand, there are thousands of persons and organisations that enjoy a fantastic level of earning and a lifestyle that most of us can only dream of yet they pay no taxes. The Government has failed to develop a sensible and effective strategy to bring these persons into the tax net.
Targeting customers at banks is consistent with the policy of going after “those dem can catch”. It is about time the Government changes this policy and instead run down the ones that get away.
Linton P Gordon
St Ann
lpgordon@cwjamaica.com
The tax measures announced by Dr Peter Phillips, the minister of finance, have attracted widespread opposition. Minister Phillips announced that there would be a tax on withdrawals from deposit accounts by whatever means including by point of sale/ATM withdrawals and intra-account transfers in the banking sector.
The percentage and the consequent amount imposed is not large. However, it appears that the objections are based on principles with which most of us can sympathise. It was the PNP administration of the 1970s that imposed a tax on the interest earned on our deposits in banks. Currently, that tax is 25 per cent of all interest that we are paid on our savings in banks.
This tax survived the administration of the JLP which was in power from 1980 to 1989. It has continued since and has now become a fixed tax liability to all savers. It should be noted, though, that the Government’s recent announcement is that the tax will be paid by the banks and not by the customers.
However, the public is sceptical of this and believe that the banks will find a way to pass on this cost to their customers, thus increasing the percentage of our savings and interest being snatched from us.
One has to concede that the Government, operating under the strictures of the IMF, is obliged to find a source to fill a gap of almost $2.2 billion in the budget. No doubt Dr Phillips and his team must have looked at all arrears, and having concluded that everywhere else is overtaxed, they zeroed in on our bank accounts.
The harsh reality is that the country has, for years, been spending more than it earns. I share the view that successive Governments continue to demand more and more from “those dem can catch” — the taxpayers. The majority of taxpayers who make their returns and pay their taxes are constantly harassed by the Government to pay even more taxes and penalties.
On the other hand, there are thousands of persons and organisations that enjoy a fantastic level of earning and a lifestyle that most of us can only dream of yet they pay no taxes. The Government has failed to develop a sensible and effective strategy to bring these persons into the tax net.
Targeting customers at banks is consistent with the policy of going after “those dem can catch”. It is about time the Government changes this policy and instead run down the ones that get away.
Linton P Gordon
St Ann
lpgordon@cwjamaica.com