by Man from Baker Hill
Montserrat will raise one hundred million dollars in new taxes…
I am Reuben Meade, your Chief Minister and this is your Budget speech 2011.
Madame Speaker, in the past, stories had been told of half million-dollar tax forgiveness for friends and cronies of past politicians. But these days, ordinary persons are almost being hounded to come and get their income tax forgiveness. Truly, it is too good to be true. It is unbelievable! That is true Rubenomics. Brothers and sisters, pay attention, something is brewing in this land of income tax confusion.
Yes, Madame Speaker, you might ask, is there something on the horizon? Brothers and sisters, for those of you who can predict the natural socio-economic policies of Rubenomics, it would not be too farfetched to assume that next year Montserratians will be faced with new and stricter system of tax laws. Madame Speaker, I say this without any pity, Montserratians, look out! You will get a new system of tax laws that may impose prison sentence on defaulters. Members of my team as well as our political scouts have been told to herald 2011 as the year the $100 million tax drive begins.
Members of the opposition will wonder if Montserrat could bear one hundred million dollars of new taxes? Just look at them, they do not understand government and politics. I say to them yes we can. Madame Speaker, permit me to explain how we will go about this thing. You folks out there, especially the Man who writes in the Montserrat Reporter, you need to study and analyze taxation. You must understand what is taxation and the purpose of taxation. Then you must determine who should pay taxes and who should be exempt from paying taxes. Montserratians get re-educated about taxation!
Comrades, at school our children must learn who should pay taxes at customs. They must learn how fines at the courthouse contribute to government revenue. They will learn why we pay to license our motor vehicles each year and pay to renew our driver’s license. They must learn why every payer of money should ensure that a postage stamp is placed on their receipt. And they must wonder if the preachers, farmers and the fishermen should be exempt from paying taxes on their income.
Madame Speaker! Our children must know that their first pay slip will show a deduction for income taxes. Our children must be aware of the word ‘income’ and fully understand what is income for tax purposes. And our children must question any system of tax laws that exempt a category of Montserratians from paying taxes on pensions if their pension is less than $60,000.00 a year.
Our children must understand that there is no inhabited country on earth that is free from tax collection and that every resident of a country is party to an unwritten contract to pay taxes as enshrined in the system of tax laws of that nation. Taxation is the essence of nationhood.
The alternative to taxation is for a nation to thief or to beg. Plundering and pirating other nations are no longer accepted means towards national development. Begging from other nations in order to build your nation carries a stench. And Madame Speaker, you know me, I am not a mendicant; I will not Beg.
So how can we raise $100 million in new taxes on Montserrat? Brothers and sisters, permit me to explain.
Firstly, You and I must understand that we have to do it; and that we do it for ourselves.
Secondly, My Ministers and I have identified the areas within our system of tax laws that could be improved upon.
And thirdly the Ministry of Finance will engage in tax re-education and education processes packed with illustrations so that every resident will become tax-wiser.
Madame Speaker, in 2011 and beyond Montserrat must come of age because begging is no longer the option I will undertake to develop our people, our nation. And even if our Government were to consider borrowing, it is only through taxation that we will be able to repay the debt. So there is no alternative to taxation. I shall not waste time to explain the education process. It has already been outlined in the first part of my Budget Speech.
Now Madame Speaker, the two key areas within our system of tax laws where we can make improvements in tax collection are indirect taxation, that is, duty colleted at customs and direct taxation or taxes on income. The employees of Customs and Inland Revenue mostly interact with the key players of our ‘buy and sell’ and service oriented economy. They must understand the connections and implications of fairness and justice. Good understanding of the processes of tax collection at customs and at Inland Revenue departments could never be over-emphasized. Already the Montserrat Reporter has inaccurately pointed to weaknesses in the chain-links of assessment and collection in those departments. The Reporter claimed that a few privileged residents and businesses are let-off from paying their due amounts. The Reporter is hinting at Bribery and has been suggesting that our Government must begin to institute corporal punishment for civil servants who breach the system for a pair of shoe or for an electronic gadget.
Madame Speaker here is a very simple illustration that should expand understanding and increase revenue. When an importer sells a motor vehicle, or a carton of soft drinks, or a case of chicken he collects from the buyer his cost, his expenses and his profit. He collects all the money paid for the item including freight and port charges. The seller collects the customs duty paid or should have paid. He collects a portion of his expenses paid for electricity, staff wages, salary, and rent or bank interest. The seller collects his profit for bringing that item and selling it to the consumer. He collects from the buyer the very income tax that he is supposed to pay to the Inland Revenue department. Madame Speaker each sale includes an element of customs duty, profit and income tax. And the trader, importer/seller must be made to pay that income tax or customs duty into the treasury. Rubenomics shall not tolerate ‘let-offism’.
Madame Speaker, our customs officers must understand that. Our traders and shopkeepers must understand that. And our accountants must ensure that the importer’s/ trader’s profit or loss is properly calculated. Every shopper must be told that each purchase includes a little bit of income tax, a little bit of money to subsidize the fees at the hospital and all the money to subsidize radio Montserrat. Every school child must be told the make up of the sales price of an item.
Honorable Leader of the Opposition, if everybody knows and understands the processes and that let-offism is a curse against the nation, then we can start the $100 million tax drive by budget day 2011. And just kidding, flogging may be the choice of punishment for let-offism,
Brothers and sisters, here is another illustration that if applied will increase direct taxes by 15%. We know why civil servants and other employees pay their fair share of income tax. It is because the information on their income is sent to Inland Revenue. We also know why self-employed persons, petty contractors, doctors, lawyers and mechanics do not pay their fair share of income tax. It is because inadequate information or no information reaches Inland Revenue. If we institute a system that gives a tax rebate to every tax payer, based on the amounts that tax payer paid to self employed persons, petty contractor, lawyers and tradesmen, the treasury can collect as much as 20% more in income taxes. Imagine every resident demanding a receipt for every repair to car and house because they will get a tax rebate.
And if we uphold the laws, such as a 25-cent stamp on each receipt, we can collect plenty, plenty more tax. And if we abandon the ridiculous policy of not charging income tax on pensions under $60,000.00 a year, we can collect a little more tax too. Besides only ex-civil servants and politicians benefit from the ‘no-tax-pension law’. And if we ask ministers of religion to pay tax on their income they will. If we say that farmers and fishermen should pay tax they would. Good God everybody gets the basic tax allowance; why give retired politicians an additional $60,000.00 allowance? Why a preacher should get a tax-free salary? Some of them get 25% of the church’s collections.
Come on! Do the sums. It would not take a rocket scientist to agree that based on the foregoing, in one year we can collect up to $10 million in new taxes. Yes do the math!
Now that we know how the tax story goes and now that everybody got his tax forgiveness, Let’s get it on. We have some new taxes to collect. Please understand if we all comply with the system of tax laws, most of us will be able to pay less and the nation would still collect more, much more. That is true Rubenomics!
Madame Speaker, our Government will send out the tax Rottweilers into every bar and restaurant. Our tax tyrants will invade every accountant’s office and warn him or her that time has changed and that flogging will be the penalty for tax avoidance.
Madame Speaker, I cannot conclude this Budget speech without saying that every ship owner, every trucking company, and every equipment operating company will have to pay tax on their profits and on interest income. I shall tell the nation about estate taxes and that taxable income will be calculated on worldwide income. Madame Speaker, may I remind Montserratians of our new double taxation agreements with the whole world.
Brothers and Sisters the Rubenomic policies of my Government gave you the one and only Tax Negotiator. You cannot eat his cake and still have it. After Budget day 2011 there will be no place to hide from the tax hounds of Rubenomics.
Madame Speaker that was more than a mouthful! Honorable Leader of the Opposition, tell Montserrat how long it should take to raise $100 million in new taxes. Not very long eh! I am sure that with your help, Rubenomics can do it in five years.
