Jamaicans are misguided and totally miss the point on the issue of taxes

ColideZ   Sweet Music Jamaica    Tech Life

At the time of writing this article the Jamaican dollar exchange rate with the US$ was US$1 : JM$110.07 and the nation was consumed by the newest nine day wonder.

A new tax on bank withdrawals  has recently been announced and with much fanfare and hullabaloo everyone excluding Vybz Kartel is up in arms about it. The truth however is that most Jamaicans have jumped onto a miss guided band wagon and few seems to understand the real economic issues as it relates to the nation's budget.

Everyone seems to have lost focus of very crucial issues. One of the most notable ones and one thing focus must be placed on is that of the exchange rate and its impact on the nation's finances.

Let me start by putting a few things into context.

• Jamaica's national debt stands at over JM$1,600,000,000,000.00. (That's a lot of zeros).
• This would mean that every Jamaican (including the just born child) has a debt burden of over JM$500,000.00 whether they like it or not. If the burden is borne buy the labour force (ages 20-65) of the country that would mean each working class Jamaican has a debt burden of approximately JM$1,327,140.00.
• Now the Government is obligated to pay back all national debts as it is written in the constitution. 

Now let us understand a few other things. Jamaicans import the lavish cars (while good for show boating and I would love to have one myself) is a drain on the foreign exchange reserves. Jamaicans also import the fuel and parts to maintain these cars. Jamaicans also import high end phones and the country also imports the flour to make bread and the beef in patties (and by extension the flour used in the patty dough). Jamaica also imports the oil used for electricity generation.


So what does this debt context have to do with the exchange rate?

Over 30% of the nations debt grows on a daily basis by the sheer fact that the Jamaican dollar devalues daily. The result of this is that each and every Jamaican will be more indebted next year this time around, only to be struck with an unavoidable new wave of taxes (whichever way the form of the tax will take) unless the Government cuts recurring expenditure drastically. As the nation's debts grow so will the need for Government revenues to pay the debt.

If there is one thing I can bet my bottom dollar on, it is the exchange rate and by extension the national debt are firmly set in motion to continue rising (I would however love to be proven wrong). As a result Jamaicans can bet their bottom dollar on new taxes and more taxes in the future whatever the form. So stop making much ado about nothing or at least stop complaining when you are creating the problem for yourself.

Until the nation realises that imports must be reduced and exports must be increased all Jamaicans should shut up and happily pay taxes or gladly embrace a lower quality of life as the government will be unable to afford to provide quality services to the people as there will be fewer resources to satisfy the nations needs. Now is the time for Jamaicans to focus on exports.

Now given this, it would be more productive for every Jamaican to take to the airwaves and demand that the Government's Cabinet be reduced in size, the politicians take a pay cut, the politicians pay back the country for their luxury cars and take the public transportation system, and the Minister of Flying Affairs seek to travel less as the people of the country have been asked to pay more while we continue to suffer under the clear miss management of the country. Jamaicans must also demand a more productive and efficient government.

Let us be driven to correct the trade imbalances, after all Jamaica has a lot to offer. Let us not complain about the tax but complain about the service and fight for a better quality service by the nation's leaders.

Oh and who ever still wishes to donate some US dollars to my account you are most welcome.

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