Compliance – DFID’S BUZ Word

by Man from Baker Hill

Almost every press release or communication given by DFID contains the word ‘COMPLIANCE’.  What is the reason for this? The compliance word seems to be in every announcement made by politicians too. What is the connotation of compliance or non-compliance? The majority of Montserratians comply with every regulation or law, so what is the issue?

For example, here is the case of two struggling civil servants, one is a career fire officer and the other is a police sergeant. Both of them have a spouse and two children. Their salary is about $3400 a month; and each month income tax is deducted by the government, their employer. One owns a house at Look Out # 2 valued at over $200,000. And each year he pays about $200 in property tax. They both comply. No matter what regulations are in place on Montserrat, they comply.

Again, they struggle to survive, yet each employee pays the direct income tax imposed on his government paid salary.  In addition, they pay indirect taxes on every item of merchandise they purchase.  They repay the merchant the customs duty paid on the rice, the sugar, the macaroni, the chicken and the can sodas. And when you examine the transactions involved in buying and selling, each consumer pay to the merchant, in advance, the very income tax that the merchant should pay to the government.

So there is no doubt that the average consumer complies; whether he or she purchases gas for cooking or for his or her motor vehicle. Yes, we all repay DELTA for all custom duty and tax paid to the government. Even the bartender pays, in advance, to the merchant, not only every cent of customs duty but every dollar the merchant is supposed to pay to the government for income tax. That’s compliance!

But here is another twist to the compliance issue. These days everywhere you turn on Montserrat, there is talk that the government paid the Look Out land owner over $9 million for land. And there is also talk that the government never deducted one dollar in tax from the payment. Is this fair? That land owner made millions in profits. He should have paid income tax on that profit. I wonder whether DFID is unaware that no tax was deducted from the transaction.

 However, the issue over that transaction is much more than compliance; and I hope that DFID is not mistaking this hole in the tax law as non-compliance. It is this; should any trader receive that sum of money without being charged income tax? If so, Montserrat must revisit its income tax laws to cover this type of trade and matters such as capital gains.

 And there is more, during the recent budget debate, on one hand it was bragged that government, with the assistance of DFID, paid over nine (9) million tax free dollars to a wealthy land owner; and on the other hand it was forcefully shouted (as if to please DFID) that the government will take the struggling petty contractor to court for a few thousand dollars in tax arrears.  Now, is this double standard or politicians entering into the realm of the deliberate confusion in the name of compliance?

Let us look at another form of compliance; each year every petty contractor pays thousands of dollars in indirect tax to maintain the roads leading to Look Out, Olveston and Belham. That is compliance.

Now, consider this scenario, each year the sand miners with their big trucks destroy the roads; they sell Montserrat natural resource making millions of dollars.  Do they pay a fair share of their sales in royalties or taxes to the government so that the struggling consumer can pay less for imported goods? Are there adequate tax collecting regulations in place so that these sand miners can comply and make more contributions to the islands revenue?

The issue as far as the Montserrat Reporter Limited is concerned is this; it is not enough for DFID to grumble about non-compliance, and then sweetheart with the politicians. That is confusing!

By the way you heard it for yourself. The Premier said election is just 15 months away. Well, just in case you are wondering about the role of The Montserrat Reporter in the next election, remember this.  We are neither politician nor opposition; we try to be part of the solution; and we believe in compliance.

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A Moment with the Registrar of Lands

by Man from Baker Hill

Almost every press release or communication given by DFID contains the word ‘COMPLIANCE’.  What is the reason for this? The compliance word seems to be in every announcement made by politicians too. What is the connotation of compliance or non-compliance? The majority of Montserratians comply with every regulation or law, so what is the issue?

For example, here is the case of two struggling civil servants, one is a career fire officer and the other is a police sergeant. Both of them have a spouse and two children. Their salary is about $3400 a month; and each month income tax is deducted by the government, their employer. One owns a house at Look Out # 2 valued at over $200,000. And each year he pays about $200 in property tax. They both comply. No matter what regulations are in place on Montserrat, they comply.

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Again, they struggle to survive, yet each employee pays the direct income tax imposed on his government paid salary.  In addition, they pay indirect taxes on every item of merchandise they purchase.  They repay the merchant the customs duty paid on the rice, the sugar, the macaroni, the chicken and the can sodas. And when you examine the transactions involved in buying and selling, each consumer pay to the merchant, in advance, the very income tax that the merchant should pay to the government.

So there is no doubt that the average consumer complies; whether he or she purchases gas for cooking or for his or her motor vehicle. Yes, we all repay DELTA for all custom duty and tax paid to the government. Even the bartender pays, in advance, to the merchant, not only every cent of customs duty but every dollar the merchant is supposed to pay to the government for income tax. That’s compliance!

But here is another twist to the compliance issue. These days everywhere you turn on Montserrat, there is talk that the government paid the Look Out land owner over $9 million for land. And there is also talk that the government never deducted one dollar in tax from the payment. Is this fair? That land owner made millions in profits. He should have paid income tax on that profit. I wonder whether DFID is unaware that no tax was deducted from the transaction.

 However, the issue over that transaction is much more than compliance; and I hope that DFID is not mistaking this hole in the tax law as non-compliance. It is this; should any trader receive that sum of money without being charged income tax? If so, Montserrat must revisit its income tax laws to cover this type of trade and matters such as capital gains.

 And there is more, during the recent budget debate, on one hand it was bragged that government, with the assistance of DFID, paid over nine (9) million tax free dollars to a wealthy land owner; and on the other hand it was forcefully shouted (as if to please DFID) that the government will take the struggling petty contractor to court for a few thousand dollars in tax arrears.  Now, is this double standard or politicians entering into the realm of the deliberate confusion in the name of compliance?

Let us look at another form of compliance; each year every petty contractor pays thousands of dollars in indirect tax to maintain the roads leading to Look Out, Olveston and Belham. That is compliance.

Now, consider this scenario, each year the sand miners with their big trucks destroy the roads; they sell Montserrat natural resource making millions of dollars.  Do they pay a fair share of their sales in royalties or taxes to the government so that the struggling consumer can pay less for imported goods? Are there adequate tax collecting regulations in place so that these sand miners can comply and make more contributions to the islands revenue?

The issue as far as the Montserrat Reporter Limited is concerned is this; it is not enough for DFID to grumble about non-compliance, and then sweetheart with the politicians. That is confusing!

By the way you heard it for yourself. The Premier said election is just 15 months away. Well, just in case you are wondering about the role of The Montserrat Reporter in the next election, remember this.  We are neither politician nor opposition; we try to be part of the solution; and we believe in compliance.