Everyone should pay taxes

Jan 30, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – One of the most perverse strategies adopted, by both the PPP/C and APNU+AFC regimes, is the practice of increasing the income tax threshold in order to place greater disposable incomes in the hands of the workers. This strategy is not only counterproductive but also contributes to a culture of tax avoidance and tax aversion.
Every employed person – whether self – or otherwise employed should pay taxes. Taxes are an obligation which allow for the public to be provided with much-needed and necessary public services.
Without taxes, the government cannot develop the country’s infrastructure. Without taxes there will be no means to build roads and bridges and schools and hospitals and parks. Ministers would not be able to dally around the country like Father Christmas opening facilities as if the monies for the works came out their pockets.
Its taxes which finance free public education and which subsidise, heavily, education at the University of Guyana. Taxes also finance teacher’s training and the provision of technical and vocational education – what people referred to as ‘trade schools’ in the past.
The taxes of sugar workers help to provide the massive subvention which supports the sugar industry. It is not a case whereby sugar workers are getting a free pass as a result of government transfers.
Subventions are used to pay public servants, free public health care, security, national defence, culture, youth and sport and to support indigenous peoples’ development.
Every citizen benefits from tax revenues. Every working person, regardless of how small his or her income is, should therefore contribute to the national tax pool.
As has been mentioned so often before, the payment of taxes is a key component of the social contract between government and the people. Belonging to society requires that people help support the provision of services within that society through the payment of taxes.
Taxes, however, are often seen as a burden. Yet as one former US Justice said, “Taxes are the price for civilisation”. You cannot wish to be part of society and not pay taxes.
Everyone should pay taxes but the tax system should be fair. One way of achieving this is to have a progressive tax system in which those who can afford to pay more, do so.
However, the rich have ingenious ways of avoiding and evading taxes. And many poor people do the same also.
Unfortunately, the purposes of taxes are being perverted locally. Taxes are now being seen less as a social and economic contribution and more as a means of putting monies and incentives in the hands of workers and businesses.
Guyana’s two main political grouping, the PPP/C and the APNU+AFC, now support the position that persons who receive the minimum wage should not pay taxes. But they should enjoy the full benefits of citizenship.
These two main political groupings, by their actions, also endorse the position that the tax mechanism can be used to put more monies in workers’ pockets. And the working class organisations accept this position, hook, line and sinker not realising how the main beneficiaries of this system are businesses.
The business class supports increasing the income tax threshold – the lower limit below which no one has to pay taxes. Increasing the threshold benefits everyone. It is in their interest to do so since it gives them a free pass.
Instead of increasing the pay of its workers, the private sector is able to circumvent paying increases by having the government increase the income tax threshold. In this way, more monies end up in the pockets of workers without the employers having to increase salaries. The increases come from the tax savings provided by government.
When the government increases the income tax threshold, it is not only government workers who benefit from increased disposable incomes but also private workers. Private businesses, apart from their workers, are therefore able to avoid paying increases or higher increases to their staff.
Guyana needs comprehensive tax reform. However, the PPP/C has never dedicated sufficient attention to such reforms. It, like the APNU+AFC, prefers to make incremental and piece-meal changes each year. It allows the PPP/C to treat tax breaks to workers and businesses as a hand-out.
And who gives them wrong! After all, the lower paid workers get excited whenever their pay cheque increases. What these workers fail to realise is that this increase is not being funded by an increase in salaries but through their own taxes, including VAT, and that which are paid by their colleagues.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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