The economy is fuelled by taxes

Nov 30, 2008 Features / Columnists

Once more the critics, having run out of things to talk about, are talking about the value added tax which was introduced to ensure that the government collects its fair share of revenue from people who earned substantially more than the working people of this country, but who, unlike the workers in the public sector, paid little or no taxes.
This has been the case for years and so people in many areas escaped paying taxes so the burden was on the public servants who by no stretch of imagination could claim to be earning a substantial sum of money.
The critics fail to remember when the government sought to levy what was a reasonable tax against the lawyers, some of whom earn as much as $20 million a year, the very lawyers protested and moved to the courts.
Doctors in the private sector also make tons of money but they too declined to pay their taxes although they imported large vehicles that not only increased the need for government to spend more on fuel but which contributed significantly to the wear and tear on the roads.
Rice farmers, taxi and minibus drivers, and businessmen also avoided paying their share of taxes but were among the first to complain about the state of the social infrastructure and those public facilities that they had to rely on.
VAT came and today the critics say that the government is using it as a milch cow, to cripple the ordinary man without stopping to understand that the introduction of VAT allowed the government to realize just how much money actually slipped away from the Treasury.
The critics note the revenue collection and conclude that the tax is exorbitant when a common examination would reveal that the volume of importation was grossly understated.
In an economy like Guyana’s, taxes mean a lot because it is through taxes that the government can expand the medical services and so offer the people the service they deserve.
There is a massive overhaul of the hospitals, construction of new ones in rural areas to help people who would normally have to pay hard-earned money to travel to the city and create a large mass of people, some of whom leave untreated and are forced to return the next day.
Taxes also help subsidise services such as electricity and water, which cost immensely more than the people actually pay. The government has to replace many of the turbines that provide electricity and the replace cost is not small.
At the same time, money from international lending institutions is not readily available because of the global financial crisis that has forced some of the contributing governments to look inward and to spend on their own economies. So the government must rely on itself and its people, particularly those who place so much on the back of the ordinary man.
The critics fail to understand that by seeking to reduce the VAT they are encouraging those who escaped the tax net to further defraud the government. In a cash-oriented economy, it is difficult to monitor what is really due to the government except when the money is deposited into the banks.
But even then, there are those who try to hide by keeping large sums of money in their homes and businesses, thereby providing the bandits with an opportunity to rob them. Some of the robberies provided the criminals with more money than the businesses would have paid in taxes so by defrauding the government they actually lose more.
However, the critics do not consider this, choosing instead to ask the government to allow further crime.
It boggles the mind that the critics do not comment on the relief measures that the government has introduced to reduce some of the burden on the ordinary worker.
When the price of gasoline fell, the government intervened on behalf of the worker to ensure a reduction in the cost of public transport.
These are things that should warrant comment but this is not the case, with people choosing instead to blame the government.

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