Kellman’s way: Harder workDENIS KELLMAN (FP)
By Kaymar Jordan in Kingston | Wed, June 20, 2012 - 8:00 AM
IF MINISTER OF INDUSTRY Denis Kellman had his way, all Caribbean countries would abolish direct taxes and overtime payments to workers.
Speaking during the inaugural Caribbean Growth Forum in Jamaica on Monday, Kellman argued that Caribbean people should work “harder and longer”, as he called for greater national emphasis on investment and productivity.
“I know my friend might call it ‘Kellmanomics’ but . . . we have to recognize that we have to find a system that will look after the worker, the investor and, at the same time, give Government what it wants.
“We must punish consumption and reward production,” Kellman said, adding that “as small developing countries we have to make our workers work harder and longer; [encourage] our investors to invest more and Government to get more revenue at the same time”.
He insisted on the need for reform of the regional tax system.
“I honestly believe that the direct taxation system is useless and that the indirect taxation is much fairer.”
Kellman also suggested the abolition of overtime, which he deemed “a waste of time”. However, he explained that such a move should only be made “if you are prepared to remove the direct tax and let that compensate, or appear to compensate, for the shift in direct taxation”.
The Barbadian minister was responding to a presentation made by Ali Mansoor, financial secretary in the Ministry of Finance and Economic Development in Mauritius, in which he detailed the programme of reform that was being implemented by his government.
Like Barbados, the small island nation, located off the southeast coast of the African continent, does not have many natural resources and is heavily dependent on services.
While praising Mauritius for its tax reforms, Kellman said: “I know people say to me that a VAT [value added tax] is regressive and I want to say I disagree because a VAT by itself is regressive but a VAT with a reverse tax credit is the right thing for the Caribbean at the present moment.
“With the direct taxation system, we tend to believe it is the rich man who is paying the most taxes, but what we do not recognize [is that] it is that man who can employ people to reduce his tax incident whereas the ones that we pretend we are helping, we are not really helping.
“With the VAT now and a reverse tax credit, you are in a position to cushion the prices for the persons that you want the incident of tax not to be on, and one of the things that we have to recognize is that we have to find a taxation system that will deliver the right amount to Government and people don’t like to hear that even though they are always asking Government to give this, give that, everything.”
The two-day forum, which concludes today, is focused on issues of innovation, competitiveness and entrepreneurship and has brought together key stakeholders from government, the private sector, academia and civil society to discuss practical solutions for ensuring growth and development of regional economies.
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