Reblog: “I don’t know. Honestly, I don’t.” by Brandon Allwood

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The first dose of the “medicine” (I hate this term in this context) has been administered and it is indeed bitter.  I’ve already seen it called poison.

Below I am republishing a post from Brandon Allwood (@brandonallwood) that he published today.  I share his frustration with the current lack of leadership in Jamaica.  Plus, frankly, I lack the energy to communicate my frustration in my own words.  I don’t know what to say or what effect it will have, but I do find Brandon’s post important because I too am a young Jamaican thinking about Jamaica’s future and feeling…lost and hopeless.  Nevertheless, a brief background: yesterday, February 12 — at 5:30 PM no less — Finance Minister Peter Phillips presented to Parliament a list of new taxes and half-hearted, unclear tax compliance measures.  I can’t even begin to respond to the continued looting of NHT funds.  Now, on Monday night Minister Phillips and the Prime Minister of Jamaica, Portia Simpson-Miller, jointly delivered a statement to the nation wherein they announced a new debt exchange program (aka JDX2 or NDX).  A similar debt restructuring program was done by the JLP-led government in 2010.  Both of these announcements — JDX2 and the new taxes — communicated measures that were surely demanded by the International Monetary Fund (IMF) before the agency enters into any new agreement with Government of Jamaica.  Basically Jamaica is broke — debt is 140% of GDP — has managed its economy poorly for too long, has a lot a debt, and now cannot pay it back.  Austerity will be the prescription…but who cares whether austerity works or not.  Anyway we’re seeking a loan to pay off or down debt (probably interest and not principal) + we just need cash but the IMF requires the country to earn more revenue, to cut costs…and just, generally, manage its affairs better.  And that management will be on the IMF’s terms, growth and social stability be damned.  Remember that Chicago Tribune editorial from January 2013? OK.  O I mention the national broadcast because during that statement on Monday, February 11, neither Minister Phillips or Prime Minister Simpson-Miller said that new taxes would be announced the next day; there was a vague statement about more information to come.  They also did not announce new taxes during the national broadcast.  I find the announcement of the new taxes on Tuesday, February 12 to be sneaky and petulant.  But that style of sharing information has been the usual with this current Government of Jamaica.  The Opposition Party Jamaica Labour Party and various members of the private sector are most displeased.  As @bigblackbarry astutely analyzed: they and we have been anancied.

At it’s root this is a governance issue.  Leadership…absent, or when it peeks out, ineffective.  Nothing about sensible tax reform, which would necessarily include improving compliance and appropriately widening the tax net, but also must include better record keeping and empowerment of the relevant tax authorities.  Nothing that I think will spur economic growth or encourage business to form or grow though I’m no econ whiz.  But you know, it’s just the callous disregard for Jamaicans that is most striking; the absolute abdication of the duty of leadership to set out a clear path and plan, and to empower a population during an extremely difficult time…all wrapped up in a persistent lack of accountability.  And to say nothing of the partisan bickering among and between Jamaicans instead of saying to both parties: talk to us straight, and figure this out!

Well on to Brandon’s sentiments, which I share.

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Before anyone accuses me of not putting forward any alternatives to address our fiscal situation, let me preface by saying that I do not have to. Very qualified, successful, respected people have put forward multiple solid, sustainable proposals that have seemingly fallen on the cement-laden ears of successive governments. Workable alternatives already exist.

I won’t spend any time discussing the credibility of the People’s National Party. I am not even going to talk about the dizzying arrogance of the Prime Minister and her (oversized) Cabinet. I am overlooking the tales of members of the Cabinet revelling and enjoying sweet sweet mas in Port of Spain—no doubt on their own dime—while the entire country sat in the dark about our economic situation. And there will be no mention of the fact that as we barrelled towards economic uncertainty, one member of the People’s National Party, decided to engage two social media platforms in a conversation about homosexuality, his Bible and the all important Tommy Lee. I asked him about the declining value of the Jamaican dollar and he is yet to respond.

I do not propose to be an analyst. I do not propose to be an advocate. Right now, I am a Jamaican. A young Jamaican who for decades to come will be straddled with the after-effects of the absolute nonsense happening now. I am not on a quest to examine which party or person is at fault or who is right or wrong. I just want some clarity on a few things.

The current Government of Jamaica (GOJ) presented an initial tax package that was true to the promised ‘bitter medicine’ we were expecting. Now, the GOJ has announced an additional tax package making the revenue target $40b. Emily Crooks says this is the largest tax package ever.

Errrmmm????? The GOJ cannot even run a tax amnesty properly. If they are having so many issues in reaching current revenue targets… what is in that coffee at Jamaica House that has them thinking they can hit a higher target? Is the GOJ cutting spending somewhere? Smaller government? That wasn’t included in the documents Peter Phillips tabled in Parliament—which surprised the entire nation—or the historic joint national broadcast with the Prime Minister, so… I don’t know.

I got a copy of the tax measures (and yes, the GOJ repeatedly mentioned that it is “committed to broadening the tax base and ensuring revenue adequacy”) and included in the GCT measures are inclusion of the Telephone Calls Tax (TCT) as part of the GCT base. This is expected to yield $1.3-billion and would “be included in the taxable base for the purpose of calculating the GCT”.

WHAT. DOES. THIS. MEAN? When Bruce Golding and Audley Shaw taxed tampons and salt, they just came out and said what the tax package meant. Although most of those measures never saw the light of day, the administration of the day said to us ‘this is what we want to do’. What are you going to be adding GCT to exactly? Who is going to pay it? What even gave you this idea in the first place? I don’t know.

The GOJ is proposing to add GCT to all fees and taxes that are payable at the ports. ALL FEES including the environmental levy, customs user fee/custom administration fee, CET, and ASD.

EL-OH-EL!

The GOJ is proposing to fix an ‘administrative anomaly’ by adding GCT to the face value of prepaid vouchers and airtime. The argument is that consumers pay the full cost including GCT for each phone card they buy, however, when service providers sell the vouchers and airtime in wholesale volumes it is sold at a discounted cost and the GCT is only paid on that discounted cost. Since retailers may or may not be registered taxpayers, the GOJ argues, the full GCT is not remitted to the coffers. The GOJ says the measure “SHOULD NOT”(and the emphasis is not mine) result in an additional tax liability to the consumer. This is going to yield a staggering 0.2-billion.

Wow. I don’t know how the country continued to run with this HUGE loophole in the system! Just wow. My mind has been blown. The GOJ has already deflected any blame for possible price increases to the consumer, since consumers already pay for the full cost of the GCT. But… ahm, if (and probably when) it costs more for these non-registered retailers to buy the phone cards, what do you think they will do? Absorb it like the good, loving, selfless and citizens they are? I don’t know

The GOJ wants to increase education tax by 0.5% for employers and 0.25% for employees and impose an additional 5% tax on “large unregulated companies”.

More taxes from of declining (in value) salaries coupled with creative corporate taxes. At the very least, I would like to be a fly on the wall in the meeting when the GOJ needs corporate support for anything. JCDC naw do nuttin’ mo’ fi di res a year? Lisa naah kip no gala dis year? No? I don’t know.

The GOJ is introducing a new fee at the ports, a Customs Administration Fee. This “will supplant the current CUF (customs user fee) and other processing fees … which would represent a more accurate reflection of the services being offered by Jamaica Customs Department”.

Is this the CUF, only new and improved? The fee will be imposed on all imports except for those by approved charitable organisations and the bauxite sector so I would like to know what exactly it is covering that is so fiscally burdensome on Customs. The government says this is in keeping with WTO (World Trade Organisation) guidelines. Countries sign international agreements that have to result in new taxes? And even so, are we only just now realizing we made this commitment? Does Peter Phillips believe we are morons? I don’t know.

The GOJ claims it is proposing to initiate measures to increase the relatively low property tax compliance rate, reform the property tax regime, introduce “transfer pricing rules” as well as “thin capitalization rules”.

The government failed miserably at a traffic ticket amnesty. The government wants to implement all these changes in a few months, some even a few weeks. The government, failed miserably, at a traffic ticket amnesty. In the GOJ’s defence, they could have been preparing to do this for quite some time and are equipped to tackle it. Did Peter speak about the capacity of the GOJ to implement these changes? What happens if these measures don’t yield the expected results? Is this the PNP’s idea of tax reform? I don’t know.

Is Jamaica House still open?

This is the most we have heard from the Prime Minister and the Minister of Finance about the economy since… well, just since. Now I understand that Sister P is busy ‘working, working, working’— but seriously? What exactly does the Prime Minister do? I ask with no disrespect. I ask only because I do not know. The Office of the Prime Minister has a communications unit. The Prime Minister has a press secretary. The nation’s Ministry of Information is HOUSED at the Office of the Prime Minister, yet still I get the sense that very little is happening at Jamaica House. The weekly cabinet press briefing, occasional long photo captions from various ceremonies and ‘PM says to band together’ style press releases are not cutting it. The PM’s few public utterances do not offer much hope either, as they are usually characterized by political bickering. Has she convinced herself she is in a dancehall clash? If you are a minister without portfolio with responsibility for a specific area… isn’t that a portfolio? Will the OPM ever stop SCREAMING in their social media updates? I don’t know.

If you have any answers feel free to let me know. I’m sure many people would like to know the answers too, as we “band together” and face the challenges we must. It’s exceedingly difficult, however, to support a government that continues to be less than forthcoming with the Jamaican people and hellbent on doing whatever it wants to do in anyway.

PS – Don’t Parliamentarians ‘walk out’ of Parliament too often? Does the move of protest still have significance? I don’t know

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