An Article from the Jamaica Gleaner
We so often misunderstand who pays taxes. Businesses don’t pay taxes…. people pay taxes! For example, the consumer pays the government GCT (General Consumption Tax), in effect a ‘penalty’, for the exchange of cash for goods/service with the business; and any tax imposed directly on the business by the govt is transferred to the consumer in the ‘price’ of the goods/services rendered. The above link leads you to an article in the Jamaica Gleaner outlining how individuals who own businesses in the Corporate Are are evading tax payments, by not registering their businesses.
Why is this so? Could it be that the Jamaican tax system is so complex, cumbersome and time consuming that people (the common man) are not inclined to pay or do not even understand what to do? In the Doing Business “Ease of Paying Taxes” rank report (www.doingbusiness.org), year after year Jamaica ranks in the bottom grouping, amongst all nations. Jamaica’s Rankings [Year: Position/No. of Countries Ranked] : 2011: 174th/183; 2012: 174th/183; 2013: 163rd/185.
Overall in 2013 report, Jamaica ranked 90th out of 185 countries (down from 85th in 2012) in terms of the overall “Ease of doing Business”. But that does not tell the full story: We ranked 123rd for Getting Electricity; 105th for Registering Property, 106th for Trade across borders and 129th for Contract Enforcement. Maybe if we simplified things, the government would have improved business registration, tax payment compliance and increases in revenue. But that is not politically profitable, so they will ensure that the status quo is maintained.
The solution proffered by Her Worship, the Mayor of Kingston, should come as no surprise, and it is of course…. harsh enforcement…..and I quote her directly here: “It is unfortunate that we are a society where we have to have the big stick but if that’s the route we have to take, I am of the belief we will just have to implement stiffer penalties in order to get persons to comply.”
We are taxed on our earnings, we are taxed when we spend our earnings, and we are taxed on the businesses we operate. Yet, the Government of Jamaica has made it so very difficult for us to pay over money, money that we earn, that they say really belongs to them. Jamaicans, judge for yourselves.