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.