Taxing Taxation

            Is it just me?  Couldn’t be!  I’m sure I’m not the only one who feels fool-fool for paying taxes.

            According to figures from the Private Sector Working Group, PSWG, only about 28% percent of Jamaicans pay personal income tax, PAYE.  A hefty 25% of my pay goes to the government every month, and that’s not including the other things I see deducted on my payslip, like NIS, NHT, Education Tax and others.  I often fantasize about the wonderful things I would do with that money if I didn’t have to pay taxes.  But alas!  To pay or not to pay is not an option.  Taxes have automatically been deducted from my salary every month in every job I’ve ever held in Jamaica, even when I was making starvation wages at my very first job.

            So how come so many people don’t pay income tax?  It couldn’t be that they don’t have income.  It also couldn’t be that they’re all employed in the “informal” sector.  These are legitimate businesses that either are deducting the taxes from their employees’ salaries and not paying it forward to the government (like the state-owned JUTC did with NIS payments!), or the businesses, although registered, are simply not in the tax system at all.  Considering that according to the PSWG, only about 3000 out of 60,000 registered businesses in Jamaica pay Corporate Income Tax (CIT), the latter seems more likely in most cases.  The fact that just 5% of businesses pay CIT is shocking!  Certainly, if I was among the 5%, I’d feel the fool for paying.  Even though it’s the right thing to do, I’d feel like I was duped.

            But it’s impossible for this level of corporate irresponsibility to continue without government collusion, for how can you be registered as a business but not registered at the tax department?  The state won’t even license your car if you don’t first buy insurance, so why isn’t that same duality applied to businesses and tax registration?  Do businesses have licenses?  I’m not sure, but it should be mandatory that to get your business license renewed, you have to show tax compliance.

            On the municipal level, I don’t think I should have to pay taxes to the state/local authority.  My little community is virtually self-governed.  A street rep collects $500 from me every month, and I don’t mind paying because I can actually see where the money goes.  The men of my community bought the equipment and built a playground for the kids last month.  A while back, the community erected speed bumps and street lights with no assistance from the central or municipal government.  Regular bushing is also done with my little monthly contribution. 

In essence, this is the concept of taxation—everyone pitching together for the greater good of the community.  However, when citizens feel like they’re not seeing that greater good, or that they’re bearing the burden because others aren’t paying their fair share, people begin to perceive taxes as exploitative and unfair.  If I didn’t see the weekly work in my community, I doubt I would hand over my $500, but I don’t have that option when it comes to legislated taxes such as PAYE and GCT.  If I felt like the street rep was only coming to my house every month and my neighbours weren’t paying their dues, I’d likewise be reluctant to pay, in which  case, I’d be cutting off my nose to spite my face, since none of us would benefit from the services and there would be no park.  That would truly be a shame. 

However, many in Jamaica ask, what has the government ever done for me?  How do we benefit from paying taxes, especially when contracts are awarded to a favoured few and tax dollars squandered inefficiently *cough—JDIP—cough*.  The four major things one expects from a government are educating our children, taking care of us when we’re sick, protecting us, and keeping our roads/streets navigable.  Yet, those who can afford it send their children to Prep Schools and fly out or attend private hospitals for medical attention.  The really wealthy have private security, so all that’s left for government is maintaining the roads *cough—JDIP—cough*.  No wonder many of these people feel they’re not obligated to pay taxes, and so, they simply don’t.

And that’s MY perspective.

The Power Problem: Lessons from Belize on Electricity Monopoly

This article was published in the Sunday Gleaner on September 4, 2011 http://jamaica-gleaner.com/gleaner/20110904/focus/focus2.html .  Thought I'd post it, considering JPS's announcement of plans for a US$600million LNG power plant

     As the complaints about power company JPS crescendo and pressure mounts on the Office of Utilities Regulation (OUR), it’s like a case of déjà vu.  Just a few years ago, Belize went through a very similar experience—a series of events that began with a flood of complaints about the monopoly power company, Belize Electricity Limited (BEL), and ended with the nationalization of the company just two months ago on June 21.  I use the word “ended” tenuously, as the nationalization by no stretch means the country’s electricity woes are over, nor does it necessarily mean light bills are coming down. 

     Between 2005 and 2008, I cohosted one of the country’s most popular call-in programs, Wake Up Belize.  BEL and the cost of electricity was consistently at the top of the agenda, beside crime and politics, and was always guaranteed to spark a heated conversation and a flurry of calls.  Listeners would present copies of their light bills, saying they’ve tried everything to conserve, yet the amount due continued to escalate each month.  Other times, they complained that they had been unfairly disconnected, or that they were forced to pay for power that they did not consume.   Sound familiar? 

     The issue was of such concern that it became a priority of the Dean Barrow administration upon gaining power in March 2008.  In April, Barrow appointed John Avery to head the Public Utilities Commission (PUC).  Avery was a former employee of BEL, but more importantly, one of its staunchest and most public critics.  He was convinced that the power company was overcharging customers and making too much profit.  In May, Avery and the PUC rejected BEL’s application for a 13% rate increase.  In June, they forced the power company to deliver a BZ$10.3 million (J$432.6 million) rebate to its customers for what it felt was “unauthorised, unjustified or ill advised spending by BEL in past years”.  Then in February of 2009, the PUC ordered BEL to reduce electricity bills by an average of 15%. 

     In making the tariff calculations, Avery slashed BEL’s rate of return from the usual 10-15% to just 8½%.  At a press conference, he told reporters, “The biggest concern is that while everybody else has to be tightening their belts and suffering from the cost that we are all experiencing right now, the increases, BEL should at least forego a little of the huge profits they’ve been reporting.”

Naturally, consumers were elated by what they perceived as someone finally standing up to the BEL behemoth.  BEL, however, challenged the decisions in the courts, and began warning of massive blackouts if it was unable to get the requested rates.  Three years of public bickering and legal battles between the PUC and BEL climaxed in May of this year.  In BEL’s annual report for 2010, presented at this year’s AGM, CEO Lyn Young is quoted as saying, "For the last three years it seems like the PUC has misconstrued its responsibility to balance the interest of the consumer and the Company….the PUC…seems obsessed with destroying what we have built over the last thirty years."  Two weeks later, Prime Minister Barrow announced that BEL, claiming to be unable to meet its debt obligations, was essentially bankrupt.  According to Barrow, Young asked him to mandate the PUC to grant “an almost unlimited rate increase”.  Barrow refused, and two days later, government announced it would take over the company.  The decision was expedited through both houses of parliament in just one day, and became a reality on June 21.  Although the company is already in government hands, the final amount to be paid to BEL’s owner, Canadian company Fortis, is undetermined. 

     It remains to be seen what the GOB will do with BEL.  The scene surrounding the company has been relatively quiet since the takeover.  There are no indications government is interested in selling the utility, and there’s also no word on what will be its strategy in managing the power company.  Will they be able to do what Fortis claimed it was unable to do with the approved rates?  Or will the new owners find that Fortis was right after all, and that the current rates are unsustainable?  And what role will the PUC now play in regulating BEL? 

     Belize has chosen the controversial route of nationalization to deal with our countries’ common problem, a route that over the years has been vilified by those in international financial circles.  Developing countries have been convinced that governments are unable to run companies, a school of thought—some would say an agenda—that led to mass and almost simultaneous privatization of utilities in the developing world in the late 1980s and early 90s.  When it comes to utilities, however, electricity and water have become vital to not just development, but also life.  Perhaps, then, private companies, motivated by profit and self-interest, are not the best ones to be in charge of these essentials.  On the other hand, governments have a social responsibility that private companies don't have, which, some argue, makes them a less than ideal business owner.  However, if Prime Minister Barrow can truly make BEL’s management autonomous, the nationalization could work and be beneficial to the people of Belize.  Mr. Barrow has said there will be no political interference with BEL's management, but with an election due in 2013, and the cost of electricity still a major social issue, it would be tempting for any political party to want to manipulate electricity rates to win votes.  Such political manipulation could result in the company becoming unsustainable, which according to Fortis, is already the case.

     Perhaps the Barrow Administration should consider the social business model proposed by Nobel Prize winner Muhammad Yunus.  Yunus, dubbed “the banker to the poor”, believes social business is the future of capitalism.  As he describes in his book Building Social Businesses: The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs, “The social business…must be self-sustaining—that is, it generates enough income to cover its own costs.  Part of the economic surplus the social business creates is invested in expanding the business, and a part is kept in reserve to cover uncertainties.  Thus, the social business might be described as a ‘non-loss, non-dividend company’ dedicated entirely to achieving a social goal” (p. xvii).   This model seems tailored for what the GOB says it wants to accomplish, and what it has been attempting to do via the PUC over the past three years.    

     The PUC has kept electricity rates in Belize incredibly stable over the past three years, despite escalations in oil prices.  Based on crude calculations ([amount due – GCT]/usage) from my own residential light bill in January 2008, the cost per kilowatt hour was approximately US$0.202.  A friend’s light bill in March 2011 revealed a cost per kilowatt hour of US$0.207.  Meanwhile, on my most recent light bill for August 2011 in Jamaica, the cost per kilowatt hour is some US$0.372, almost double what it is in Belize!

How Jamaica chooses to handle the power problem now will shape the future of this country.  Already the OUR has stepped in with an investigation into JPS’s billing practices; meanwhile, the GOJ has been exploring alternative energy sources.  But will these measures do anything to make electricity more affordable in the short to medium term?  As the Golding administration attempts to rescue the Jamaican economy, it must recognize that the global economic crisis and the global energy crisis are one and the same.  The next few years will be critical to Jamaica’s economic and, importantly, human development.

Bob Marley and the Birth of Black Consciousness

          I’ve always believed that watching the movie Malcolm X sometime during high school, and my subsequent seeking out and reading of his autobiography, was the beginning of my consciousness as a Black person.  Indeed, it was a time of great self awareness and awakening.  Before, I had not thought much about my racial identity outside of what we were taught about the ethnic groups in primary school in Belize.  I knew I was half Creole—my mother being of the light-skinned straight-haired variety from the village of Burrell Boom; and half Garifuna—my father being a very dark skinned man originally from Dangriga, who understood the Garifuna language but rarely spoke it. 

     My father is so dark, his passport picture looks like an ink blot on the page.  We laughed about it, although really, it wasn’t funny that the equipment at the Immigration Office wasn’t capable of capturing the likeness of a dark-skinned person.  He also once told me that years ago, when he was dating my mother, some people would remark, “konkas (a very large type of housefly) inna milk”.  It wasn’t said with any malicious intent, but I suppose it’s the kind of self-deprecating humor that Black people have come to adapt.

     My mother, a teacher, was very proud of her culture, and went to pains to also teach us about my father’s culture.  As children, my brother and I attended Garifuna language classes.  To this day, I can sing the Belizean national anthem, count from one to ten, and introduce myself in Garifuna.  My neighbor, Ms. Emily, also happened to be a proud Garifuna woman who hosted dance classes, and so we received much of our indoctrination into our father’s culture via her.  As for the Creole culture, we absorbed that through language and tradition—my grandfather’s stories told under the house on the large septic tank on Freetown Road in Belize City; my grandmother’s cooking.  As light-skinned as my mother’s side of the family is, none of them would ever claim to be white, although it is said that my grandfather’s ancestor was a Scottish man.  If you’d ask them, they’d all say they’re Creole, which in Belize can mean any variety of colour, and which literally means mixed.

     I never really thought about these things until high school.  And sure, it was Denzel’s realistic depiction of Malcolm that triggered something in my consciousness, but without a doubt, it was my father’s music that planted the early seeds.  Sundays were his time to “beat out”, as we say in Belize; that’s when he would play his music loud enough that it reverberated throughout the house.  Bob Marley was one of his favorites, and also Burning Spear.  I remember when he first brought home a Muta Baruka CD and started playing it.  My brother and I didn’t get it.  We laughed at the strange mix of chanting and music and skits and what perhaps was poetry, we weren’t quite sure.

One day, I remember picking up the booklet that came with one of the Bob Marley CDs and reading the lyrics of his songs. 

Until the philosophy

That holds one race superior

And another inferior

Is finally and permanently

Discredited and abandoned.

Everywhere is war!

Until the colour of a man’s skin

Is of no more significance

Than the colour of his eyes

Me say war!

Until the basic human rights

Are equally guaranteed to all

Without regards for race

War!

Until that day

The dream of lasting peace

World citizenship

And the rule of international morality

Will remain but a fleeting illusion

To be pursued but never attained

Well everywhere is war!

     At the time, I wasn’t aware Bob was singing the words of Haile Selassie.  I didn’t even know who Selassie was, nor Marcus Garvey, from whom he also borrowed liberally, but I remember I started paying more keen attention to Bob’s lyrics and regarding my father’s music as not just his Sunday noise and old people boring music, the way my own daughter now regards my old Tupac tapes.  Like me, in a few years she’ll begin to get it.  She’ll also begin to understand what Bob Marley was singing about.  Unlike me, she’s already aware of Marcus Garvey, since he’s a national hero of Jamaica and they learn about him in school. 

     What Bob Marley did for so many people around the world was awaken a self consciousness quite like the moment when Adam and Eve first realized they were naked in the Garden of Eden.  Their nudity was something that had never bothered them before; likewise, the ignorance of the state of the Black person was a simple fact of life for many.  In some places—South Africa, the southern United States—where the dichotomy between Black and White was a lot more obvious, and obviously unjust, many had already come into this consciousness; but in places like my little Belize, where racism was a lot more latent, Bob was the one who began to change our paradigms.  For me, it was like a child learning to read.  Have you ever been around a child learning to read?  It’s like a whole new world begins to open up before their eyes.  They begin reading signs on buildings and streets, everything they can get their hands on.  They ask a lot of questions about words they can’t pronounce and what they mean.  They are suddenly experiencing the world in a different way; things make sense that never made sense before. 

     That’s the power of Bob.  The reason his music continues to sell as much as it does, is that every day, a new generation of young people discover him, relate to him.  Thirty-one years after his death, and on this, what would have been his sixty-seventh birthday, Bob Marley remains culturally relevant to millions of people around the world who, through his music, are just becoming conscious of their Blackness and how that affects their social relations, their perceptions and their identity.

     It’s incredible how much Black consciousness, philosophy, ideology has come out of the small island of Jamaica, where I now reside with my family.  Bob, Marcus, Louise Bennett (whose Back to Africa I discovered in Standard 6).  Yet, so many years later, I find Jamaicans still afflicted by an identity crisis.  This is a majority Black country that refuses to identify itself as such, and instead chooses to live under the illusion, the national motto, “out of many one”.  And while I’m not trying to deny the existence of other cultures in Jamaica, the simple fact is that they are a very small minority in a country where, in my opinion, society has created an artificial division between Black and “brown”, associating them in the antithetical geographical constructs of “uptown” and “downtown” Kingston, the haves versus the have nots.  Three and a half years living in Jamaica and I’m still not comfortable with being called “brownin”.  Bob Marley was the son of a White man and a Black woman; he grew up in “country” and moved as a child to a tenement yard in Trenchtown, and so despite his “brown” colour, would have been shaped by the social experience of living “downtown” and growing up poor.  So perhaps it is through that existence and what he came to represent following his convergence to Rastafarianism that no one would dare call Bob Marley “brown”, nor would they deny that he was a Black man; I’m sure he’d have it no other way.

     And that's MY perspective.