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Jamaica’s ‘STUPID TAX’


 

As if, Pay As You Earn (PAYE), National Housing Trust (NHT), National Insurance Scheme (NIS), Education (Edu), HEART (HERT), statutory deductions and pension schemes were not enough taxes and contributions to pay out of your monthly salary, in Jamaica you now have to pay a new tax when withdrawing money from the bank.
Somewhere along the lines of grossly high electrical bills; due to the disproportion in the amount of light being provided to the island and the amount of people who actually pay for it, General Consumption Tax, National Taxes, constantly inflating oil prices, bills, other utilities, food and stationary paychecks, the Jamaican people are once again being asked to bend over come June 1, 2014 to pay, on a graduate rate system for withdrawals less than one million a 0.1 per cent tax.
by Clovis

Cartoon by Clovis

 

This measure will mean that persons withdrawing $1,000 will have to pay $1 in taxes. Conversely, persons withdrawing a sum greater that $20 million will have to pay a 0.05 per cent tax; those withdrawing more than five million, but less than $20 million will pay 0.075 per cent tax; and those taking one million to five million will pay 0.09 per cent tax.

The new tax will apply to electronic banking, point of sales, cheques, and withdrawals at ABM, ATM or ETM as well as over the counter and internet transfers, with the exception of transfers between accounts of the same person in the same financial institution. This new tax will be more so, a consideration for the common man who does not have a wealth reserve separate from their day-to-day cash-on-hand needs, as can be acknowledged in the value difference of $1 from $1000 ($999) and $750,000 from $10,000,000 ($9,250,000). The more you buy, the more you withdraw, the more you e-transact, if you put your money in, if you take your money out, you have to pay for it.
The tax revenue projected is estimated at 23.4 per cent of GDP, and includes $3.2 billion already announced for minimum business tax, the betting, gaming and lotteries sector, as well as the tidying up of customs regulations.
The general concern seems to be that much taxes are already lost by mismanagement of structures and policies put in place to collect taxes and re-infuse them into the country and hence increasing taxes, without appropriate and accountable infrastructure, will be of no effect. In addition, the minimum business tax that was proposed in 2012, where all registered companies and self employed professionals would be required to pay a tax of $60,000 JMD; regardless of whether a loss was made, is also being considered.
The objective of reeling in big money, does not appear to be of conflict to figure heads as the impositions threaten, the already dismal, present national conditions for small businesses and entrepreneurs that are trivial to the country’s growth. In comes increasing black market activity in GDP and enter “The United Jamaica of [insert foreign countries we are indebted to here],” if there is no strategic action and soon. Small businesses and entrepreneurs are barely catered for in Jamaica with high interest rates on loans and little effective development initiatives or subsidies and hence the privatization or underground economizing of industries and the poor manufacturing and creative industry’s infrastructure.
A one percent tax does not seem like much, unless you already pay a gamut of taxes to a government that is hardly held accountable for anything. Jamaica Labour Party’s, North East St Andrew Member of Parliament, Delroy Chuck, described the measure as representing a “stupid tax” and urged Phillips to reconsider.
Jamaicans have expressed both anger and indifference to the recent announcement. While some persons are circumstantially in agreement with the tax, stating that countries such as Norway, Germany and Sweden have some of the highest taxes, but do well economically, others are simply tired and angry about the familiar cycle of poorly executed decisions by the government. It is also discouraging that the new tax seem ever only to benefit the rich and keep the middle and poorer classes decreasingly so.
While the country is in dire need of a revolution and the government sits on their pedestals failing to see the people at their level, out in the deep end, everything should be done to prevent the loss of confidence. Confidence is a concept on which the world is built and much of what keeps economies alive is not material. Before running to the banks or blocking roads to the people’s detriment, the onus is now on the population to examine the new taxes proposals, as a people determine what is the means to the end and DEMAND transparency.
Will the government’s actions mean a better future for this generation or the next? How long? Why? What can the people do, except sit around and be taxed for balancing budgets as they watch the prime minister jet set on airplanes, presumably fueled by water?
Who is keeping the checks and balances, why is it not the people?

 


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