TAXATION: Your Consideration For Our Social Contract

Man from Baker Hill

Every resident of Montserrat is party to an implied social contract of which consideration is a key element. Taxation is consideration. Tax is the price we pay for living here… on Montserrat. The other element of that social contract is the services provided through the functions of government that are to allocate funds to health care, education, police protection and civil servants salary or pension; to stabilize the economy particularly to ensure that the economic environment is good for doing business like sand mining; and to redistribute tax taken from successful enterprising citizens to the needy ones so that they can spend it with the enterprising people.

Other important functions of our government are to provide sea ports and airports, distribution of mail services, the building of roads and bridges, and to provide services for water and electricity.  So what’s the deal?

The truth is… as long as Montserrat exists a government must function and provide services to residents. So if you choose to reside here you must pay a number of taxes. These taxes can be referred to as the loosely embodied Montserrat system of tax laws. Our various types of tax, deemed necessary to support the functions and services of government, have evolved over time and are largely common to all tax codes or tax laws of every country. There is no such thing as a tax free country; so to believe that, is to believe a myth. What usually happens though, is that the natural resources of a country, such as our volcanic sand, will influence the types of tax and the amounts that residents are forced to pay.

I use the word ‘forced’ because the word ‘consideration’ implies a legal detriment on the part of a resident. In other words if a resident does not pay his tax, the long arm of the law will deal with him; it is the law of Montserrat. If you live here, you must have heard about the tax negotiator and the Rubenomic promise to prosecute tax criminals.

So much for the word taxation and government functions; but how about our system of tax laws and how did we develop them? Ha ha ha, ha ha, ha…, understanding the system of tax laws; that’s really the deal! But the issue of taxation is for the politicians to show and tell or explain. Montserratians beware; serious times and challenges are ahead!

I have followed most of the political elections held on Montserrat since the mid sixties and I cannot recall hearing any politician speak positively about taxation. Yet there could be no development on Montserrat without the contribution made by taxation, albeit taxation of and on other people.  We are in the 21st century yet 95% of our capital expenditure is contributed by foreign tax payers’ money. The remaining 5%, if so much, comes from local tax payers; and if you doubt me, ask the Financial Secretary.

The point I want to stress in this article, is the importance of taxation. Taxation is about national maturity; it is the essence of nationhood. Today Montserrat is negotiating with itself to rid itself of tax arrears and to start a process of jailing taxpayers or to sell the properties of ‘unable to pay ’Montserratians. Next month, September 2011, we will celebrate some semblance of national maturity with the introduction of our new Constitution. But where are we going?  Though confused and weary, people are more concerned with the taxation matter than they are with the constitution. Yet not one program is on the horizon to start a tax education program. Again Mr. CM Meade, after tax negotiation what?

Please Mr. Reuben Meade, build a lasting legacy in your last term as an active politician. Seize the opportunity, start a program of tax education, begin with our system of tax laws.  Educate on the meaning of royalties; educate on industrial development; educate on enterprise and the sand miners; educate on redistribution of wealth and taxation. Sir Meade, silence your critics, let Rubenomics stand for political, fiscal and economic maturity. Let it be clearly recorded that during your term in office you taught Montserrations to honour their social responsibilities; and that you explained to them the true meaning of TAXATION: CONSIDERATION FOR A SOCIAL CONTRACT… the price for living on Montserrat.

 

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A Moment with the Registrar of Lands

Man from Baker Hill

Every resident of Montserrat is party to an implied social contract of which consideration is a key element. Taxation is consideration. Tax is the price we pay for living here… on Montserrat. The other element of that social contract is the services provided through the functions of government that are to allocate funds to health care, education, police protection and civil servants salary or pension; to stabilize the economy particularly to ensure that the economic environment is good for doing business like sand mining; and to redistribute tax taken from successful enterprising citizens to the needy ones so that they can spend it with the enterprising people.

Other important functions of our government are to provide sea ports and airports, distribution of mail services, the building of roads and bridges, and to provide services for water and electricity.  So what’s the deal?

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The truth is… as long as Montserrat exists a government must function and provide services to residents. So if you choose to reside here you must pay a number of taxes. These taxes can be referred to as the loosely embodied Montserrat system of tax laws. Our various types of tax, deemed necessary to support the functions and services of government, have evolved over time and are largely common to all tax codes or tax laws of every country. There is no such thing as a tax free country; so to believe that, is to believe a myth. What usually happens though, is that the natural resources of a country, such as our volcanic sand, will influence the types of tax and the amounts that residents are forced to pay.

I use the word ‘forced’ because the word ‘consideration’ implies a legal detriment on the part of a resident. In other words if a resident does not pay his tax, the long arm of the law will deal with him; it is the law of Montserrat. If you live here, you must have heard about the tax negotiator and the Rubenomic promise to prosecute tax criminals.

So much for the word taxation and government functions; but how about our system of tax laws and how did we develop them? Ha ha ha, ha ha, ha…, understanding the system of tax laws; that’s really the deal! But the issue of taxation is for the politicians to show and tell or explain. Montserratians beware; serious times and challenges are ahead!

I have followed most of the political elections held on Montserrat since the mid sixties and I cannot recall hearing any politician speak positively about taxation. Yet there could be no development on Montserrat without the contribution made by taxation, albeit taxation of and on other people.  We are in the 21st century yet 95% of our capital expenditure is contributed by foreign tax payers’ money. The remaining 5%, if so much, comes from local tax payers; and if you doubt me, ask the Financial Secretary.

The point I want to stress in this article, is the importance of taxation. Taxation is about national maturity; it is the essence of nationhood. Today Montserrat is negotiating with itself to rid itself of tax arrears and to start a process of jailing taxpayers or to sell the properties of ‘unable to pay ’Montserratians. Next month, September 2011, we will celebrate some semblance of national maturity with the introduction of our new Constitution. But where are we going?  Though confused and weary, people are more concerned with the taxation matter than they are with the constitution. Yet not one program is on the horizon to start a tax education program. Again Mr. CM Meade, after tax negotiation what?

Please Mr. Reuben Meade, build a lasting legacy in your last term as an active politician. Seize the opportunity, start a program of tax education, begin with our system of tax laws.  Educate on the meaning of royalties; educate on industrial development; educate on enterprise and the sand miners; educate on redistribution of wealth and taxation. Sir Meade, silence your critics, let Rubenomics stand for political, fiscal and economic maturity. Let it be clearly recorded that during your term in office you taught Montserrations to honour their social responsibilities; and that you explained to them the true meaning of TAXATION: CONSIDERATION FOR A SOCIAL CONTRACT… the price for living on Montserrat.