The Editor, Sir:

There has been much talk recently about tax reform, and while I doubt the Government will do anything drastic and is just interested in squeezing more tax dollars from an overtaxed population, I would still like to make some suggestions to the ministry of finance.

The current Pay As You Earn (PAYE) flat rate of 25 per cent is inherently unfair. It lays the burden of taxation on the middle class. Not even in the USA, the capital of capitalism, is there such a bias.

I propose a three-tiered tax rate - 20 per cent on the first $2 million, 30 per cent for $2 million to $5 million and 40 per cent above $5 million, leaving the tax credit in place and at $250,000, and, of course, eliminating the education tax and NIS, which will be funded from the PAYE.

Voluntary payments

NHT payments should be voluntary. Anyone who wishes to derive a benefit must contribute for five years before and after they receive their benefit.

This would leave more money in the hands of the middle class, and make the NHT contribution directly related to the beneficiary.

The savings would be spent on basic items from which the Government would collect GCT. This proposal would have the effect of stimulating the economy and have no negative impact on the tax coffers of the Government.

Tax burden

As for corporations, the corporate tax rate of 33 per cent is one of the highest in the world, coupled with the company's tax contribution to NIS, education tax, HEART and NHT, and we have a tax burden that is largely responsible for the 80 per cent failure rate of new companies.

If Jamaica is to turn around its downward trend we must stimulate local businesses and the most important step is to ease this burden. Make the corporate tax rate the same as the individual rate and this will remove a significant deterrent to many 'hustlers' from formalising their operations.

These proposals are simple - they restructure the tax burden and would stimulate the economy and set an environment that will put Jamaica on a path of growth and development.

I am, etc.,

PAUL DUNCAN

pduncan428@gmail.com

Kingston