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While the ruling Jamaica Labour Party (JLP) and the opposition People’s National Party (PNP) have both pledged to implement the tax reform measures put forward in the 2004 Matalon Tax Report, former Prime Minister Edward Seaga, is not at all convinced that they should.
In an interview with the Sunday Herald, Seaga says that he has never accepted the Matalon Report for two reasons. Firstly, its over-reliance on <span style="font-weight: bold">indirect taxation, citing that it would affect the poorer classes more than the upper </span>classes, and secondly, the progressive tax system as it would act as a deterrent to hard work.
The final report of the Tax Policy Review Committee to the Government of Jamaica, in 2004, colloquially referred to as the Matalon Report, has set forward a series of tax reform recommendations. One of which is the phasing out of direct income taxes and the government relying on indirect taxation for revenue.
The Report also promotes a progressive tax system. Under a progressive tax system, as a person’s income rises, a greater proportion of his income goes into taxes. The opposite of the progressive system is a proportional system, in which one flat tax rate is administered no matter what the level of income is.
Seaga says that the consultant to the Tax Policy Review Committee in 2004, a Professor Roy Ball, from the University of Chicago, proposed the identical measures to him in the 1980s when he was the prime minister of Jamaica. Seaga said that he rejected those measures for the same reasons stated above.
Seaga explained that a progressive system “leads to a lot of tax evasion and non-compliance” as individuals seek for ways to avoid the higher taxes. He also explained that putting more taxes on the wealthy would be counter-productive as the wealthy hold the means to capital, and higher taxes would act as a deterrent to investment.
Seaga pointed out as well, that the progressive system acts as a disincentive to people in the middle classes to gain and grow wealth, as they are unable to enjoy the fruits of their labour due to the discouragement of higher taxes. Having one flat rate would be much more acceptable, as it would simplify the tax system and would act as an incentive to tax compliance and hard work.
‘Taxing the poor’
<span style="font-weight: bold">Joseph Matalon, now president of the Private Sector </span>Organisation of Jamaica, was unable to respond to the Sunday Herald before press time, but in a 2004 interview with the Jamaica information Service (JIS), Matalon pointed out that if the percentage of tax paid did not change as income rose, then this was regressive because the lower income classes were paying a greater percentage of their income in taxes than the higher income classes.
Seaga was also critical of indirect taxation over direct taxation, as he said it would put the poorer classes under more pressure. He explained that the poor didn’t pay direct income taxes due to the tax threshold, but they would be affected by indirect taxation, such as consumption taxes on items that they need on a day-to-day basis. In other words, Seaga <span style="font-weight: bold">explained, that an indirect tax would be “taxing the poor.”</span>
As for the plan to increase taxes in the New Year by the government, Seaga was cautious in his review, but did draw a parallel with his term in the 1980s. He said that when his government came to power in the 1980s, the Jamaican people were in a similar position, as they were now. And he took the decision not to raise taxes, as it would push “the people’s spirit to despair.”
<span style="font-weight: bold">Why is seaga disagreeing with mattalan .wat wrong with him these days ,first two different Jamaica and now dis.</span>
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In an interview with the Sunday Herald, Seaga says that he has never accepted the Matalon Report for two reasons. Firstly, its over-reliance on <span style="font-weight: bold">indirect taxation, citing that it would affect the poorer classes more than the upper </span>classes, and secondly, the progressive tax system as it would act as a deterrent to hard work.
The final report of the Tax Policy Review Committee to the Government of Jamaica, in 2004, colloquially referred to as the Matalon Report, has set forward a series of tax reform recommendations. One of which is the phasing out of direct income taxes and the government relying on indirect taxation for revenue.
The Report also promotes a progressive tax system. Under a progressive tax system, as a person’s income rises, a greater proportion of his income goes into taxes. The opposite of the progressive system is a proportional system, in which one flat tax rate is administered no matter what the level of income is.
Seaga says that the consultant to the Tax Policy Review Committee in 2004, a Professor Roy Ball, from the University of Chicago, proposed the identical measures to him in the 1980s when he was the prime minister of Jamaica. Seaga said that he rejected those measures for the same reasons stated above.
Seaga explained that a progressive system “leads to a lot of tax evasion and non-compliance” as individuals seek for ways to avoid the higher taxes. He also explained that putting more taxes on the wealthy would be counter-productive as the wealthy hold the means to capital, and higher taxes would act as a deterrent to investment.
Seaga pointed out as well, that the progressive system acts as a disincentive to people in the middle classes to gain and grow wealth, as they are unable to enjoy the fruits of their labour due to the discouragement of higher taxes. Having one flat rate would be much more acceptable, as it would simplify the tax system and would act as an incentive to tax compliance and hard work.
‘Taxing the poor’
<span style="font-weight: bold">Joseph Matalon, now president of the Private Sector </span>Organisation of Jamaica, was unable to respond to the Sunday Herald before press time, but in a 2004 interview with the Jamaica information Service (JIS), Matalon pointed out that if the percentage of tax paid did not change as income rose, then this was regressive because the lower income classes were paying a greater percentage of their income in taxes than the higher income classes.
Seaga was also critical of indirect taxation over direct taxation, as he said it would put the poorer classes under more pressure. He explained that the poor didn’t pay direct income taxes due to the tax threshold, but they would be affected by indirect taxation, such as consumption taxes on items that they need on a day-to-day basis. In other words, Seaga <span style="font-weight: bold">explained, that an indirect tax would be “taxing the poor.”</span>
As for the plan to increase taxes in the New Year by the government, Seaga was cautious in his review, but did draw a parallel with his term in the 1980s. He said that when his government came to power in the 1980s, the Jamaican people were in a similar position, as they were now. And he took the decision not to raise taxes, as it would push “the people’s spirit to despair.”
<span style="font-weight: bold">Why is seaga disagreeing with mattalan .wat wrong with him these days ,first two different Jamaica and now dis.</span>
link
interesting how the pnp and the jlp agree fe implement mattalan plan.
the Matalons r such a fixture u wouldn't believe it..regardless of wich party dem still get housing scheme contracts 
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