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Budgets, revenue support, DFID and taxation

by Man from Baker Hill

Yes, and Taxation! During the past two weeks we heard everything about DFID and Budgets; but we heard not one word about taxation. Yet the discussions were all linked to taxation; it was about how much UK taxpayers’ money Montserrat will need to add to its taxpayers’ money. That is called the budget talks; something that every government must contend with every year.

And no government could develop and present a budget without seriously considering every element of the national system of tax laws; because taxation is the most important matter in the sustenance of every nation. In fact, it is universally agreed that taxation is the very essence of nationhood. So it is very sad that taxation is not taught in our schools.

However, worse than the absence of tax education, is the strange fact that except for the Montserrat Reporter, the words tax and or taxation are hardly ever used in the media. Imagine an entire election campaign was conducted and the word taxation was never used; and five months after the election, despite the budget talks, we still do not hear the word taxation.

I have to believe that most Montserratians hate or fear the word taxation; but I…, I love the subject matter taxation. I enjoy speaking about it and I love writing about it too. And I am never bothered about the reactions of other people to my opinions on taxation.

So this year I promise to write a number of articles on taxation. However, there is no need for anybody to despair or for anyone to be seriously concerned. You see, I am not a legislator so I cannot introduce bills and tax laws in the house of assembly; and I do not even associate closely with politicians so I am not seeking to influence the making of tax laws. No, not at all! I observe; and sometimes I share a comment forcibly.

And so I write the following.

As residents of Montserrat, we are conditioned by a series of laws most of which we obey without questioning. We obey these laws automatically. For example, each time we spend money a portion of that money is a contribution towards the nation’s tax revenue. And for most of us each time we are paid wages and salary a portion of that income is taken for a contribution towards the nation’s tax revenue. Similarly, the service provider pays a set of taxes and fees, such as custom duties and license fees in order to be in a position to sell us goods and services. The service provider pays the tax in advance knowing that the laws of Montserrat allow him to charge each customer for those customs duties and fees. The service provider is also allowed to charge each customer an additional amount in the price of the goods to be paid towards the nation’s tax revenue.

In a nutshell, the foregoing is the system of tax laws of Montserrat. It is as natural as any other system of nature. Just as the birds must sing and the fish will swim, so too residents of Montserrat must pay taxes. Montserratians pay taxes for the opportunity to live on and enjoy Montserrat. That’s all! As Jesus said, pay unto Caesar that which is Caesar’s. But … symbolically, Caesar is Montserrat.

It seem to me that in the not too distant past, merchants and other service providers understood the purposes for the systems of tax laws of Montserrat; they obeyed and honored those laws too. Back then, even though the economy was small, the service providers paid their taxes for the running of the nation. And they did it honorably; they did not seek to get custom duty free concessions on every other importation.

But these days, with a much larger economy, a peculiar kind of disrespect for the nation’s system of tax laws has crept into Montserrat. There seems to be a style of fiscal-political tax management on Montserrat based on ignorance. Every service provider wants to avoid paying customs duties; and each year a different service provider wants forgiveness for not paying into the treasury the taxes he collected from the consumer. And so, every sitting of the Legislative Assembly there are countless SR&O’s in favor of service providers to waive their payment of customs duties or for the forgiveness of their tax arrears.

For example, at the last sitting of the Legislative Council in 2014, there were almost 100 SR&O’s presented to the house that sought to waive the payment of import duty taxes on just about everything. I was amazed! And these SR&O’s are just for the benefit of a few. In fact there were some that we learn are very questionable, since allegedly, recipients paid in kind for the ‘favour’ at election time especially.

I am really amazed at our attitude towards something as natural as taxation. I still cannot accept that during the period of budgetary discussion there was no mention in the media of the word taxation. That is unacceptable for an island whose politicians brag that they were balancing the budget before the volcano. Is it ignorance that the ‘TAX’ word is now more feared than the volcano? Is this really true?

I am not sure, but to reduce this type of fear I strongly recommend that Montserrat declare 2015 as the year for tax education. And DFID, BUDGETS, INCOME SUPPORT AND TAXATION might be the best topic to start the education process. What do you think?

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by Man from Baker Hill

Yes, and Taxation! During the past two weeks we heard everything about DFID and Budgets; but we heard not one word about taxation. Yet the discussions were all linked to taxation; it was about how much UK taxpayers’ money Montserrat will need to add to its taxpayers’ money. That is called the budget talks; something that every government must contend with every year.

And no government could develop and present a budget without seriously considering every element of the national system of tax laws; because taxation is the most important matter in the sustenance of every nation. In fact, it is universally agreed that taxation is the very essence of nationhood. So it is very sad that taxation is not taught in our schools.

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However, worse than the absence of tax education, is the strange fact that except for the Montserrat Reporter, the words tax and or taxation are hardly ever used in the media. Imagine an entire election campaign was conducted and the word taxation was never used; and five months after the election, despite the budget talks, we still do not hear the word taxation.

I have to believe that most Montserratians hate or fear the word taxation; but I…, I love the subject matter taxation. I enjoy speaking about it and I love writing about it too. And I am never bothered about the reactions of other people to my opinions on taxation.

So this year I promise to write a number of articles on taxation. However, there is no need for anybody to despair or for anyone to be seriously concerned. You see, I am not a legislator so I cannot introduce bills and tax laws in the house of assembly; and I do not even associate closely with politicians so I am not seeking to influence the making of tax laws. No, not at all! I observe; and sometimes I share a comment forcibly.

And so I write the following.

As residents of Montserrat, we are conditioned by a series of laws most of which we obey without questioning. We obey these laws automatically. For example, each time we spend money a portion of that money is a contribution towards the nation’s tax revenue. And for most of us each time we are paid wages and salary a portion of that income is taken for a contribution towards the nation’s tax revenue. Similarly, the service provider pays a set of taxes and fees, such as custom duties and license fees in order to be in a position to sell us goods and services. The service provider pays the tax in advance knowing that the laws of Montserrat allow him to charge each customer for those customs duties and fees. The service provider is also allowed to charge each customer an additional amount in the price of the goods to be paid towards the nation’s tax revenue.

In a nutshell, the foregoing is the system of tax laws of Montserrat. It is as natural as any other system of nature. Just as the birds must sing and the fish will swim, so too residents of Montserrat must pay taxes. Montserratians pay taxes for the opportunity to live on and enjoy Montserrat. That’s all! As Jesus said, pay unto Caesar that which is Caesar’s. But … symbolically, Caesar is Montserrat.

It seem to me that in the not too distant past, merchants and other service providers understood the purposes for the systems of tax laws of Montserrat; they obeyed and honored those laws too. Back then, even though the economy was small, the service providers paid their taxes for the running of the nation. And they did it honorably; they did not seek to get custom duty free concessions on every other importation.

But these days, with a much larger economy, a peculiar kind of disrespect for the nation’s system of tax laws has crept into Montserrat. There seems to be a style of fiscal-political tax management on Montserrat based on ignorance. Every service provider wants to avoid paying customs duties; and each year a different service provider wants forgiveness for not paying into the treasury the taxes he collected from the consumer. And so, every sitting of the Legislative Assembly there are countless SR&O’s in favor of service providers to waive their payment of customs duties or for the forgiveness of their tax arrears.

For example, at the last sitting of the Legislative Council in 2014, there were almost 100 SR&O’s presented to the house that sought to waive the payment of import duty taxes on just about everything. I was amazed! And these SR&O’s are just for the benefit of a few. In fact there were some that we learn are very questionable, since allegedly, recipients paid in kind for the ‘favour’ at election time especially.

I am really amazed at our attitude towards something as natural as taxation. I still cannot accept that during the period of budgetary discussion there was no mention in the media of the word taxation. That is unacceptable for an island whose politicians brag that they were balancing the budget before the volcano. Is it ignorance that the ‘TAX’ word is now more feared than the volcano? Is this really true?

I am not sure, but to reduce this type of fear I strongly recommend that Montserrat declare 2015 as the year for tax education. And DFID, BUDGETS, INCOME SUPPORT AND TAXATION might be the best topic to start the education process. What do you think?