ONE CAN UNDERSTAND the need for a cash-strapped government to seek every means to rake in money, but it is many years now of more talk than action in putting together a comprehensive and meaningful taxation plan for future years.
The average Barbadian should have no difficulty with an effective and efficient tax system, but piece-meal attempts at minutes to midnight will scarcely bring about any drastic change.
The prognosis does not look good. Reactionary knee-jerk efforts at trying to plug loopholes and leakages may seem a wise decision pro tem, but neglecting to put a revamped tax system in place can become an albatross around the neck of the current and any successive Government.
As a matter of urgency, our tax system should be overhauled to reflect much of what most knowledgeable tax expertshave taught.
A good tax system should ensure maximum social advantage being used to finance public services.
A good tax system should cause minimum aggregate sacrifice, allocated among taxpayers according to the ability to pay.
A good tax system recognizes people with the same ability to pay and treats them in the same way without any discrimination whatsoever.
A good tax system contains not one or two bases from which government extracts large amounts of revenue, but a motley number that are equitable, convenient to pay, economical, certain, productive and flexible.
A good tax system has built-in flexibility, so that changes are possible according to the changing dynamics of the economy, adding or withdrawing a tax without destroying the entire system and its balancing effect.
A good tax system is a system of evenly weighed components containing not only progressive, regressive or proportional taxes, but a healthy combination of all the aforementioned inclusive of direct and indirect taxation.
A good tax system is simple, easily and efficiently administered.
A good tax system does not hamper the development of trade and industry, but instead assists in the rapid economic development of the country, mobilising the surplus resources in the economy and not depriving the private sector of its resources.
A good tax system takes into consideration the rights and problems of taxpayers. It should have a positive effect on production and equitable distribution of national income and wealth.
It effectively balances the weight and burden of taxation in relation to the sacrifice of surrendering the purchasing power of real income and the relative capacity of the taxpayer to bear the burden of the tax. A good tax system contains taxes that are strictly in relation to the taxpayer’s ability to pay. Last but not least, the guiding policy of any good tax system rests on the maxim of “least aggregate sacrifice”.
– MICHAEL RAY
