Robert Buddan, Contributor
IN 2000, a Korean prime minister resigned after being convicted of tax evasion. He apologized.
In 2002, the general secretary of the Liberal Democratic Party in Japan resigned after his aide was convicted of evading taxes. He took responsibility.
Edward Seaga's companies are not guilty of tax evasion but it could be that the Privy Council's ruling amounts to guilt for tax avoidance.
The ruling is that regardless of DHC's role in managing Enchanted Gardens, Mr. Seaga's company, Town and Country, was the registered taxpayer, and since 1997 Town and Country was acting like the registered taxpayer by holding discussions about the tax arrears with the tax authorities and attempting to make some payments while never raising the issue of its obligations.
From a moral standpoint, some of the GCT due must have been money collected from users of the facilities to be paid over to the Government.
We know that a lot of this happens but to know that the company of a parliamentary leader and candidate for Prime Minister has been doing this, is rather barefaced.
For some Jamaicans, the whole appeal episode was just an attempt to 'beat the system' and the appeal process was just a way to avoid or delay justice.
We note that, according to reports, Mr. Seaga's companies might not be able to meet its obligations in full.
In the media, the subject of Mr. Seaga's succession has already arisen. What are we to make of all of this?
OPTIONS FOR SEAGA
I would say that if Mr. Seaga, through his companies, has knowingly avoided paying taxes, then he is not fit to be Prime Minister.
I think the right thing for Mr. Seaga to do is resign. I believe he said he would, should he be found for the tax liability.
At any rate, Mr. Seaga has lost too many elections, is an aged leader, and there are many able persons in the Jamaica Labour Party (JLP) who are fit to lead.
But there are less dramatic options for Mr. Seaga.
He could at least apply for leave from the party to devote his full attention to meeting his company's tax obligations. In that time he should also satisfy the Party that he can meet these obligations without compromising his duties as leader and undermining the integrity of the party.
A party deserves the undivided attention of its leader. Furthermore, the public should know that the money that Mr. Seaga's company uses to pay the tax liabilities are from legitimate sources and from sources and on terms that will not undermine his commitment to the national interest.
Failing any such initiatives from Mr. Seaga, I would expect the JLP's Central Executive to call a special meeting to review the issue.
It should ask Mr. Seaga to explain how he intends his company to meet these obligations and to keep the party abreast of any negotiations with the tax authorities.
At such a meeting the Central Executive could offer some arrangement for Mr. Seaga to take a leave of absence, or it could relieve Mr. Seaga of some of his duties to give him time to sort out his company's problems. The executive might also call for a vote of confidence in Mr. Seaga's leadership.
Should Mr. Seaga choose not to resign and should the JLP retain his leadership, the party should establish a body to assist Mr. Seaga through sorting out his future financial and political positions.
This way it would ensure that the integrity of the party is not compromised.
POLITICAL RESPONSIBILITY
There is something that the political system can take from this episode too.
Both political parties will want to learn the lessons of political responsibility from this. It is a good opportunity for political parties to develop and for parliamentary codes of conduct to include a business code of conduct.
This would serve to guide members on matters that go to court and specifically on tax and other obligations under the law.
It is also time to criminalise the act of taking taxes from people and not paying it over. The country's fiscal soundness is constantly assessed by credit agencies and low ratings harm investment, job creation, welfare and growth.
Too many people are not paying taxes and penalties for not doing so are not enough.
The JLP must admit that the Privy Council ruling against Mr. Seaga's companies is at least a great embarrassment to the leader and the party. It would not want a repeat of this.
In a sense, the JLP must accept the blame for the hurt this has caused the party. There have been too many financial issue that have been swept under the carpet or not fully investigated.
The failure of a bank headed by Dr. Headley Brown in which Mr. Seaga had large investments was one issue that was hardly looked into. The matter of 'forgetting' to repay a large loan was another.
POLITICAL AUTHORITY
Politicians around the world have resigned over embarrassing affairs often enough. They cite moral responsibility or the nature of circumstances in doing so.
In the current issue, either would apply. What is ultimately considered is the moral and political authority of the person to continue.
Mr. Seaga's authority on taxation and financial matters has been seriously eroded.
If he is to depend on the generosity of the state which he so opposes as a corrupt state, to write off some of his tax debts he would seriously compromise his moral stance in politics.
To negotiate with the Minister of Finance who just months ago he insisted should resign, would be humiliating. His call for early elections is now muted since he cannot expect to lead a Government until his company pays its taxes.
Mr. Seaga's stance on the CCJ now has to be looked at in a new light. Did he oppose it because he feared that it was a PNP Court out to get him on these taxes? If so, then this no longer applies.
If his opposition is based on the lack of quality of regional judges, then since the Privy Council has upheld our local courts, this must be seen as a victory for their quality. Besides, the case that we lack high quality judges has not been made.
BOLD CHANGES
The tax issue has implications for much more than Mr. Seaga's company tax liabilities.
It has implications for his leadership and for his politics. Both have suffered and the JLP must decide whether it can carry this burden.
This is a blow against the JLP's old guard. Here is an opportunity for the new wind of change that is blowing within the JLP to make further bold changes in the leadership and values of the Party.
Mr. Seaga had made the unfortunate statement not so long ago that he has no friends in politics. He will need to make friends now.
There are friends in and of the JLP who will appreciate his years of service to the party and who will believe they owe it to him to assist in these times of troubles.
At the same time, the JLP has to find its own way through this difficulty.
Its potential leaders must insist that the winds of reform keep blowing and that the JLP move on to becoming a better party just as the PNP is doing.
It is a time to face up boldly to the options of the party and to decide in favour of bold changes.
Robert Buddan lectures in the Department of Government, Mona, UWI. E-mail: rbuddan@uwimona.edu.jm
