In light of the global economic downturn facing governments and taxpayers; in particular the Caribbean region ongoing debate on taxation, debt and sustainability, it is important that our citizens, leaders in business, government and NGOs pay attention to better understand our current conditions as it affects our individual state and where we must go in order to minimize the individual tax burden while providing essential and needed government services.
Due to recent releases from Grenada ministry of finance, international and regional oversight organizations regarding Grenada’s economic debt (120 percent of GDP – second in the world to Greece), some $18 million a month in the negative, some 40 percent unemployment, debt restructuring and a need for Grenadians to make sacrifice. This input to the current debates and conversations strictly relates to how our nation(s) may focus and utilize short, medium and long-term plans to get control, better manage and sustain our private, government and NGO resources as it relates to investments, growth and debt.
It’s encouraging to see the dialogue taking place in Grenada and in some Caribbean states to address this state of affairs for the purpose of getting our region out of long-term danger. On the other hand, the majority of our citizens are experiencing wide spread disconnect, non-engagement, lack of faith, hope and trust with most of the solutions being implemented. Citizens expect it to work now.
It is in this light the need to inject a point of view in the ongoing debate with the hope that our leaders and more citizens will collaborate to achieve balance, fairness and positive impact. Each state’s economic condition affects the region as a whole; that’s why it’s important for each state to be experiencing healthy and sustainable economy in order to enjoy much benefit for all our citizens.
In the backdrop most citizens always want to get more government services but usually want to pay less tax while others should pay more. This is the very mindset affecting balance and fairness and needs open debates for workable solutions, tailored to impact our individual state resources.
The online Business Dictionary tells us that “Taxation -- is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. Governments use taxation to encourage or discourage certain economic decisions”. It also defines “Taxation Principles
” covering eleven headings (adequacy, broad basing, compatibility, convenience, earmarking, efficiency, equality, neutrality, predictability, restricted exemptions and simplicity).
There is a reality that when we examine taxation we ought to conclude that all citizens pay taxes directly and or indirectly. Some critical questions and answers include who pays, how much, for how long and how taxes are distributed. This concerns many citizens in the way we govern our precious resources. Every citizen must have a self-interest that will result in each of our country having less government employees and more employees in the private sector. I submit we will pay lower taxes to government while receiving more services.
Many years ago, I remember a professor saying to the class, “Taxes we must pay, it’s a combination of fees and penalties, we often can avoid paying penalties but not fees.” In addition, our regional governments secure grants, loans and technical support as added resources which help lessen the burden on taxpayers. As taxpayers we always want balance, fairness and impact from the taxes we pay; to achieve this in the context of how it affect each taxpayer it will be helpful if we all become more aware of the many elements which make up a country’s complex taxation structure.
• Taxes and penalties are collected – from energy, utilities, housing, land, business, imports goods, income, VAT, late payments etc.
• Taxpayers – workers, small to large businesses, purchasers etc.
• Distribution of taxes – ministries operation, infrastructures, services, salaries, pensioners, debts, economic investments etc.
• Adjustments – due to economic changes locally, regionally and internationally from time to time there must be corrections in the tax code to affect the income, spending and other external conditions.
Taxation indeed is one of the pillars that affect a nation’s economic growth, decline and or debt and in today’s world it is very important that a nation get it right as far as possible. In the last two decades our region have experienced significant increases in energy resulting in much higher cost to investments, goods, services, transportation, construction, education, labour, taxes and literally everything we purchase. At the same time, the global economy has experienced higher unemployment and little or no increase in income, thereby causing contraction in our region.
It is in this setting that citizens in the region ought to develop the resources we own and share by building clearer and stronger relationships with our governments, businesses, labor unions, social-partners, churches, community organizations, etc. to ensure that we develop strategic models thereby empowering many citizens to access technical support, funding, viable markets and distribution on a scale in which we can compete with the rest of the world.
Having the right development strategic models in place to generate value added goods, purchasing more of what we produce, monitoring each industry development and sustaining jobs; this will no doubt result into long-term economic growth in our region.
Indeed there is no pie in the sky, the sooner we develop these strategic models and implement them to involve more of our citizens the sooner we can get a bigger piece of the global pie. The more dollars in the private sector’s hands and the right tax policies in place with balance and fairness, the greater the impact we will see in private investment and returns. As Caribbean citizens let this generation plot the best solutions to achieve lasting legacy of economic growth!
“Love for Caribbean Citizens”