Taxes in Guyana seem to make the rich richer and the poor poorer

Aug 13, 2011 Letters

Dear Editor,
Taxation is a form of monetary collection that is contributed by citizens in a democratic society and pooled into a comprehensive fund by the leaders of that society in order to fulfill the needs of the population at a given time in terms of providing the requirements of the citizens’ needs. Therefore, it can be assumed that taxation is a patriotic and community-type obligation for a citizen for the purpose of benefitting the community and as a whole for the good of society. Therefore, every income earner is required to pay taxes.
However, the phenomenon which is evident in Guyana is that the working class (the employed) who form a huge proportion of the middle class households are being over-taxed when compared with the taxes that self-employed and the elite businesses pay in connection to income to taxation ratio. Due to confidentiality reasons I cannot provide an actual example, but generally speaking, a salaried person working for G$60,000 monthly would have almost G$7,000 deducted for PAYE even before the paycheck is received at the end of the month. The tax rate is over 33 percent of income in that case and the deductions are over 10 percent of gross income. Also to take into calculations are NIS, VAT, Property Taxes and other mandatory deductions. On the other hand, a business making over G$1,000,000 a month would have to file VAT Returns. It would be expected that a business will also pay a similar ratio as compared to a salaried employee. Well, probably not.
The first factor is that businesses can legitimately reduce their taxes payable by offsetting income from expenses. However, some ‘scampish’ businesses claim they make no profit for several years, even though assets are acquired and the business is expanding, and they seek the representation from so-called professional and prominent accountants in order to prove the falsified claims. These ‘scampish’ businesses cry foul on the taxes they have to pay even though their extravagant lifestyle tells a different story. These ‘scampish’ accountants have no regard for the integrity and code of ethics of the accounting profession, since their main objective is pleasing their client to get hefty accounting fees in return. Also of note is that these rule-breaking accountants cry foul on the profits even when the pace of new asset acquisitions are rapid in speed and they have money to go on vacations and spend money on luxury items. Yet the working class is entailed to working paycheck to paycheck and having their hard-earned money deducted at the end of the month. I’m not endorsing that taxes are bad; the idea is that a salaried employee cannot reduce the tax payable with the expenses incurred such as food, transportation to work and housing while the ‘scampish’ businesses enjoy the protection from shady accountants by disguising as expenses personal non-business-related items such as jewellery, overseas vacations, expensive dinners and so on in the tax computation. This is injustice and ‘eye-pass’ to the salaried employee who has bills to pay.
The taxation system of Guyana seems to make the rich get richer and the poor get poorer. Kudos to the GRA for the good work in not collecting the fair amount of taxes from the ‘scampish’ businessmen and accounting firms.
Haresh Dhanpaul

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Taxes in Guyana seem to make the rich richer and the poor poorer

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