Guest Editorial – Man from Baker Hill
Is it significant that one of the first major international agreements which Reuben Meade, as Premier, signed on behalf of Montserrat is a tax agreement? Will history record our first Premier as the father of tax reform and education on Montserrat?
Montserrat, please understand that in the near future the international community will impose on itself mandatory standards of tax systems and measures. Montserrat, please understand that our major donor countries have insisted that we adopt tax laws that are comparable to theirs. Montserrat, please be aware that our Great Benefactor Britain gave us a system of tax laws similar to theirs, that they have the power to impose their system of tax laws on us anytime and that very soon they will.
Montserrat, be aware and understand that our system of tax laws is the only thing which keeps us attached to our accustomed standard of living. And whether it is our perceived peaceful country, or the available free health care from our ‘Monday morning casualty department’ at the hospital and or the ‘sweet sight’ of the yellow school busses with rowdy children learning the skills to politically lead and manage, please be aware that these standards were achieved due to of our system of tax laws or Britain’s.
The Montserrat Reporter (TMR) has taken a position on tax education, and because of that, there seems to be a sad misconception pervading Montserrat that the editor and I are uninformed or is insensitive about the struggles wrought by the volcano. Some crooked and lofty civil servants have become so vain that they believe every article in the Montserrat Reporter is about them and their ignorant and corrupt ways. Then, there are some Montserratians who believe that they must be allowed to recover every dollar lost to the volcano before they pay income tax are worried that the British are reading the newspaper.
To the contrary, The Montserrat Reporter (TMR) understands the struggle to rebuild and to repurchase lost assets. We are fully aware of the difficulties to maintain viable businesses on Montserrat. (Who better understands…? The publication is infrequent and each one is published at a loss.) But note well, corrupt activities of public servants or private sector will not be condoned… and, yes there are many. The Montserrat Reporter understands the importance of a fair system of tax laws as well as appropriate tax education targeted especially at our young people who will have to carry the tax baton to the next generation.
The Montserrat Reporter will inform and educate on matters that are relevant and urgent. And there is none more relevant or urgent on Montserrat, at this time, than a system of taxation which is equally fair to each citizen from the cradle to the grave. Hence our decision to ask for politically sanctioned tax education.
This week Reuben the Premier signed a tax agreement with the German Government, which he said was the twelfth so far with international countries. He explained that signing these agreements make it easier for Montserrat to do business with the international community, especially in banking. I recall that about six years ago the local banks had to enter into a similar arrangement whereby they agreed to make available to the European Union information on their residents and citizens saving accounts.
And most of us can recall lots of talk about the Common External Tariff (CET) over the past years. But what will the CET mean for Montserrat? Will it affect the tax that government collect from importation of goods? And if so, how will Montserrat adjust to CET and its impact? Will the Government have to remove import duties collected by the Customs Department? Are we aware that import duty is mostly tax paid in advance by Merchants who never recover these taxes because they never sell the merchandise? Seriously, if you were to examine the warehouses of the major local merchants you will find millions of dollars of obsolete merchandise on which tax had been paid. In other words the merchants subsidise the government payroll.
Taxation is a complex matter for all nations. It is the most necessary ‘man made law’ in the universe. It affects every human being from the cradle to the grave. Taxation is always an urgent matter; but it is only highlighted once a year in the budget speech when politicians seek to confuse about no new taxes or changes in the rates and allowances.
It is therefore imperative that we seek to unravel and understand our system of tax laws now, today! We must begin to educate the young of this generation, immediately. Our future depends on their attitude towards taxation. TMR stands ready to assist in this or any other education drive.
Almost twelve years ago the Montserrat Reporter published a series of articles on taxation; in fact the issue of November 10, 2000 boldly asked the government to forgive all arrears of income, company and property taxes. The Editor and I are very pleased that our advice on tax forgiveness has been heeded even though only in 2011. Many may not recall the moods of the politicians in 2000. But the headline of March 31, 2000 captures CM David Brandt accusing leading opposition MP Reuben Meade of double standards over comments on the issue of tax forgiveness that he made to DFID and on ZJB.
TMR recognizes that the landscape has changed since the year 2000. Hence we need much more than mere tax forgiveness. We need to discuss among ourselves what is fundamentally flawed with our system of tax laws and seek to correct them if we can. For example, earlier in this article I explained that customs duty paid by merchants, is in essence tax paid in advance. Should the merchant get a rebate of that tax if the merchandise is not sold after five years? Should a minister of religion earn a tax free salary? Could Montserrat reduce the tax rate and collect more tax if everybody pays his fair share? Should Montserrat wait on a system of tax laws imposed by the international community, especially our benefactor Britain? Premier Reuben Meade must answer those questions through a comprehensive tax education programme.
TMR is neither hasty nor wrong; it is neither uninformed nor insensitive; it informs and document for posterity so that future generations will know and understand from whence they came. Montserratians, consider 2012 as the year for tax education; it is relevant and urgent!
