Dennise Williams, Staff Reporter
NORTON-COOKE
THE TAX system could be improved by raising the General Consumption Tax (GCT) to 22.5 per cent and eliminating income tax, said Ethlyn Norton-Coke, director of Tax Services at Deloitte & Touche (Jamaica) .
The country's low tax compliance level was one of the issues addressed at the Gleaner Editors' Forum on Wednesday. The forum focused on taxation and solicited the opinions of leading tax experts.
Mrs. Norton-Coke went on to explain her position.
"Culturally, we are not attuned to paying income tax," she said. The result is that many opt out of the system and then find it difficult to return because of the harsh penalties for those owing back taxes.
GETTING AWAY WITH MURDER
"It is better to move towards consumption tax," he said. "With the current income tax system, the self-employed individuals are getting away with murder. And that includes the vendors."
Vendors need to formalise their operations and be included in the tax net, she stated.
However, Brian Denning, partner at PricewaterhouseCoopers cautioned that, "while consumption tax is more collectable, at the end of the day we can't lose sight of one's ability to pay."
And Allison Peart, partner at Ernst & Young added, "Consumption taxes alone would tax the poor."
COMPENSATION
But Mrs. Norton-Coke responded that, "We can compensate them. We can create social programmes and tax exemptions for the basic foodstuff."
Mr. Denning noted that there was a social fund recommended by the Matalon Committee in 2005 which would reduce the impact of taxation on the poor. However, this was not implemented by the Government.
"From what I see now, I don't know how we would effect a higher consumption tax and withdraw the income tax with fairness, Mr. Denning said. "I think people will be badly burnt ... If people are not generating more income, they will not be able to pay additional income tax."
