THE RECENTLY announced four per cent cess violates sensible and usual taxation principles. It also batters those who pay their taxes. It does nothing to make those who do not pay their taxes start complying.
Corporate or personal, taxation is paid on profits, or income, earned. Tax is payable after, and only if a profit is earned. Corporations and individuals should only be expected to pay their taxes when they have received a cash flow arising from profits.
The four per cent cess, which was announced as a pre-payment of corporate tax, has turned this equitable system on its head. Taxpayers are now being asked to go to their banks, borrow money at extremely high real interest rates, and pre-pay their taxes long before they earn the profits and get the cash flow to pay these taxes.
The four per cent cess is effectively at best an interest-free loan to Government for the period from the import date until the traditional tax due date. The Government is not happy with an interest-free loan. They are now saying that the loan (four per cent cess) may not be repayable if total profit taxes in a year are less than the cess! This is disgraceful.
The Government has introduced a fine based on import costs against those businesses that do not make a profit of sufficient size for the profit taxes to offset the cess. Unbelievable! The Government continues to make insufficient effort to collect taxes from those who do not now pay. It is probable that the same persons who now do not pay import taxes will be able to similarly avoid the four per cent cess.
Dr. Omar Davies, the Minister of Finance, has fallen on his face. The introduction of the cess is inequitable, and there was inadequate preparation and thought given to its introduction.
The Government needs to consider removing the four per cent cess, which as it currently stands, is an anti-business measure and is likely to affect the law-abiding taxpayer more than the criminal who does not pay taxes.
It is outrageous for the Government to expect taxpayers to borrow money at high interest rate without any certainty of receiving refunds. It is grossly unfair that refunds are not subject to high market interest rates.
Let us hear from the Government about their measures to collect taxes from those who do not pay. In the absence of seeing their specific proposals implemented towards this end, one may be forced to believe that the Government cares little for the law-abiding taxpayers.
There is bound to be increasing national clamour over this inequitable cess unless the Government wakes up.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
