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EDITORIAL: Cultural industries sector must pay taxes


EDITORIAL: Cultural industries sector must  pay taxes

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EVERY TAXPAYER IN Barbados, whether individual or corporate, complains about the level of taxes they must pay. The fiscal challenges the country has been facing and the demand for even more and better services has meant greater rather than fewer impositions on an already burdened people and businesses.

So little wonder the outcry from entertainment promoters about the impact of the valued added tax (VAT) on their operations and their call for relief. But, the reality is that there are other business people who would also like “an ease” in order to stay in business and keep people employed. The reality is that VAT is a cost which the customer must carry, rather than the business selling goods or offering a service. Admittedly, the promoters will have to find a way around their usual “complimentary tickets” to avoid a direct imposition on their own bottom line.

No one can deny the cultural industries sector has been a backbone of social cohesion, and has brought income to those involved along its long value chain while at the same time providing entertainment to the public. The sector has, however, remained a largely informal one, and needs to operate differently today. Given Government’s fiscal situation, every sector, especially this now much-touted cultural industries, will have to carry its weight in direct taxation, especially VAT.

It is a well-established fact that many in the cultural industries internationally do not square off well with the tax officials. There are examples which abound in the United States where the Internal Revenue Service is relentless in the pursuit of its duties to ensure the collection of taxes, sometimes many years later when avoiders and evaders may have forgotten.

Our promoters, and indeed all others within the cultural industries, must operate whether as small, medium or large scale enterprises, and as such must adopt the standard business systems, which require meeting their statutory obligations. No one can deny the vagaries of the sector, but this is all part of the risk any business encounters. It is for practitioners to have a plan to mitigate the uncertainties by pursuing a marketing mix which must of necessity include profit.

Promoters, with the support of others in the wider cultural industries, must continue their lobbying efforts. They should also look at what has been done in other jurisdictions, notably South Korea, to clearly grasp the preferential tax policies for entities in their sector. There is a need for a win-win situation here, but all businesses must have proper governance structures which necessitate accountability and transparency in their operations.

Promoters should recognise that paying taxes is not about being an equaliser. It has always been a burden and a difficult undertaking for the tax collector even from the times of Zacchaeus. But, it must be done.