Businesses, households overtaxed – GCCI
The Georgetown Chamber of Commerce and Industry (GCCI) is contending that the population is overtaxed and that there are hardly any measures in the 2019 Budget to address this issue, which it says, can result in an increase of smuggling.
With the economy is projected to grow by 4.6% in 2019 and the tax revenue by 9.9%, Chamber President Deodat Indar believes that households and businesses are being taxed more than they earn.
“Gross Domestic Product (GDP) is the sum of all incomes. So if the sum of all incomes is only growing by 4.6%, how is it that you are collecting from the same economy, 9.9%.
“It means that you’re collecting more from businesses and households than they are generating,” Indar told News Room on Thursday.
The GCCI head is contending that the taxation policy should be aligned with the growth of the economy.
Indar, who works in the field of finance and accounting, explained that when a population is overtaxed, citizens find ways to avoid paying and in the end, government will lose.
“There’s only so much you can afford to pay,” he said, noting that could end up having to roll out tax avoidance strategies.
“If you overtax persons more than they can actually pay, you will find that you will have an administrative and enforcement issue now. You got to go after people,” Indar explained.
Junior Vice President of the Chamber, Timothy Tucker explained that the situation had already started in the agriculture sector.
“By putting VAT on pesticide, you had areas in Berbice and outlying areas where the VAT didn’t affect the farmers because they weren’t buying from people that were brought in legally. They were buying from illegal importers. So the government didn’t get any tax whatsoever,” Tucker explained.
In Budget 2019, Finance Minister Winston Jordan announced the removal of the taxes on the pesticides and limestone used in the agriculture sector – a move which the Chamber has welcomed.
But it noted that moving ahead, more needs to be done to change the tax regime so that households get more spending power, which can, in turn, benefit the business community.