Those Big Shows

Sep 10, 2010 Features / Columnists, Peeping Tom

As promised, this week I will examine the issue that led to a small-time promoter taking his life by jumping into the Mahaicony River.
This small-time promoter was before the Courts on tax evasion charges. He was placed on minimal bail, but yet the bail money could not be raised, and facing the humiliation and indignity of spending time in jail, he decided to make a run for it and ended up drowning in the river.
His case has raised a number of questions about the inequity in taxation policy. The opposition has been quick to point out that this small-time promoter was before the courts while large promoters enjoy tax waivers.
It was pointed out, for example, that the Jamzone event enjoyed tax waivers. This is a major promotion which takes place every August in Guyana, and which attracts a number of top foreign performers.
The concerts are well attended. Each concert normally has about 15,000 persons in attendance with each person paying $2000 as an entry fee. Then there is a big event at a resort which also attracts a huge crowd. In all there were no less than around 60,000 persons at these concerts, paying $2000 per head. This shows the size of the promotion which enjoyed, according to the Minister of Tourism, a tax holiday.
There was a report in the media which suggested that some 60% of the expenses of the promotion were covered by sponsorship. With this sort of support, including a tax holiday, one can surmise at the huge profits that were made.
Now contrast this with a small-time promoter putting on a few dances. This small-time promoter does not enjoy any tax holiday, but is taken to court for tax evasion. How does the public see this contrast?
The layman will see it through rich/poor bifocals. The layman will see a small-time hustler being taken to court for unpaid taxes while the big promoter enjoys the benefit of tax holidays.
The layman will question why a tax holiday was given to a large promotion but not to a small man. This will raise questions about unequal and possibly unfair tax policies.
The government obviously sees the value in these big concerts. They do attract a great deal of persons, are highly popular, and are good for the country’s tourism product. If top-rated foreign artistes are to come to Guyana, they have to be paid properly. In order to have these artistes come to Guyana, it may be necessary to waive the fees paid to them. This is something that should be considered, if our high taxation will act as a disincentive for foreign artistes to come to Guyana to perform.
It would be much better if instead of granting individual waivers, the government would implement a policy of waiving the taxes on the fees of all foreign artistes whether they are from CARICOM or elsewhere.
This would ensure that all promoters who have to bring foreign artistes to Guyana know beforehand what their tax obligations are and therefore avoid having to get mired in controversy over a tax holiday.
The government should avoid having to grant waivers only for shows during certain periods of the year. There is no longer any peak or off-peak tourist season in Guyana. The flights are almost always fully booked right through the year and therefore the entire year should be treated as one long tourist period
At the same time, something needs to be done for small promoters. The large promoters will need tax breaks to pay the performers, but they really do not need any other tax breaks.
The small promoters on the other hand need to be encouraged, since they also provide a useful service to the community. Perhaps the government could consider a smaller tax bracket for these promotions, as they need all the support they can get to stay afloat.
There is never going to be a level playing field, but at least some attempt can be made to show that our tax policies do not favour the large promoters at the expense of the small hustlers.
In the meantime, the government should make public just what concessions were granted to Jamzone and indicate whether other promoters would be able to enjoy the same benefits either now or later in the year.

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