Prime Minister Bruce Golding

WAIVERS, tax relief and concessions are eating into the Government's coffers, Prime Minister Bruce Golding has said.

The prime minister, in his contribution to the 2008/2009 Budget Debate last week Tuesday, said that "for every $100 of revenue we collect, $60 goes back out in tax relief, waivers and concessions".

He said that his government would be honouring its commitment to reform the tax system to reflect equity and to make it easier and less complicated to pay.

"Improving our tax system is an important part of the strategy to enhance the business and investment climate," Golding said.

Inequitable tax system

"We could significantly reduce taxes and collect significantly more taxes if everybody paid and this will be the aim of the comprehensive tax reform programme, which we intend to introduce next year," Golding said.

The prime minister described the tax system as inequitable, inefficient and leaky. He outlined that average customs duty collections amounted to only five per cent of the value of imports; one per cent of registered companies account for 75 per cent of corporate taxes while 75 per cent of registered companies account for less than one per cent of corporate taxes. The prime minister added that 80 per cent of company taxes and 50 per cent of property taxes were not being collected.

"Apart from PAYE taxpayers, only 4,000 individuals are paying income tax. It is estimated that quater million persons who should be paying something are paying nothing," Golding pointed out.

Finance Minister Audley Shaw announced a tax amnesty earlier this month, which he said, was aimed at encouraging people to clear arrears. The amnesty ends in October.

Meanwhile, the prime minister has announced his intention to review the way in which waivers are granted.

Matter concern

"Discretionary waivers are a matter of great concern. They are granted primarily by the minister of finance and, to a lesser extent, the minister of agriculture. They come under a lot of pressure from waiver seekers. I don't like it one bit! They (the ministers) don't like it either," the prime minister said.

Golding said that in 2006/07 discretionary waivers by the minister of finance amounted to $12.5 billion. "That represents taxes that were waived. Some of it is justified, example imports by Food for the Poor and other charitable organisations. But $12.5 billion is much too much and represents a hole that has to be plugged."

daraine.luton@gleanerjm.com