Tax reform changes to get underway

The government announced its intention to start the process of tax reform in this country with the issue of green paper 1/11 dated May 10, 2011.  Since I am a strong advocate of the need for changes to the tax system then it is incumbent upon me to assess the government’s proposals.

The process is to achieve certain objectives (paragraph 1.2) including simplicity, equity and improved compliance while at the same time meeting the revenue demands of the budget.  These are the factors that we must keep in mind when assessing all changes that have been proposed.  In keeping with that mandate the paper recognizes that the citizens must be main stakeholders in the development of the new tax regime (1.4).  The public has been invited to present comments and recommendations on these changes.

We have a problem in this country when it comes to asking for comments about anything especially in government.  There is a tendency to politicize any recommendations and to throw them out simply because the opposition agrees with them or puts them forward.  In addition I often find that our leaders ask for criticisms but have no intention of accepting any of them.  There is a feeling among leaders that they have all of the answers and that they do not need any assistance from anyone else.  We have already seen a recent example of this type of behaviour with the approach taken to negotiating with the trade unions that represent the public sector.  If you are not prepared to listen to the voices of others then do not ask for help.

The idea of incorporating the views of the public in tax reform is not a new one but it is an important and necessary one.  Tax reform will affect different sectors in different ways and discussing these concerns will provide useful information about the effect that tax policies have on these areas.  I would thus encourage the government to keep an open mind during this process and to look at each proposal carefully and measure it against the stated objectives of the paper.  Do not simply dismiss it as was the recent case with the concern expressed by the agricultural sector.  Instead invite the parties to submit a paper highlighting their concerns and then be prepared to discuss the matter. 

There are many flaws that exist in the current tax system and the only way to fix them is by getting feedback from those who are being hurt by such policies.  If we are going to do tax reform properly then it is important that we try to address as many of these problems that we can.  Therefore bring on the proposals, let us review them and accept any changes that need to be made in order to improve the system.