The Jamaica Gleaner reported on Monday last that in the face of endless criticism and threats of street demonstrations Prime Minister Bruce Golding withdrew a planned J$21 billion tax package. According to an online report, in a statement issued on Sunday last, Mr Golding said: “I have heard the cry and the appeal of the Jamaican people” as he committed to reviewing the tax and coming up with an alternative.

In the wake of the global financial crisis which severely affected Jamaica, the Golding administration signed an agreement with the International Monetary Fund that would bail the country out. However, it needs to raise J$21 billion under the deal, and in order to do so had proposed to increase the general consumption tax, subjecting every basic food item except rice and flour to taxation; it was to raise the rate by one per cent and tax items such as sanitary napkins and aids for the disabled. Jamaicans said no; a collective no, and the opposition People’s National Party (PNP) thereafter announced that it was planning to take to the streets with non-violent demonstrations.

There is no doubt that the PNP would have been able to muster massive support given that the issue would have affected people’s pockets. And while the demonstrations might have started off as non violent, given Jamaica’s history, they would hardly have remained that way.

While Mr Golding is the prime minister of Jamaica and leader of the Jamaica Labour Party, the ruling party, there was recognition that he and his government were elected by the people and are answerable to the people. They backtracked and held consultations with some key stakeholders and were to announce a revised tax package yesterday.

This is in vast contrast to what obtained in Guyana when the prohibitive value-added tax (VAT) was introduced in January 2007. Unlike Jamaica, which already had a general consumption tax, VAT was a totally new tax to Guyanese.

When it was announced there was general outcry at the 16 per cent rate that was set. It was then and still is now considered to be way too high; taxpayers were also dismayed at the list of items to be taxed. While some essential food and other items were subsequently zero-rated, the PPP administration held firmly to the announced rate. There were a few protests, but not on a scale that would have alarmed the government. And then it all fizzled out.

Even after the first year, when the revenue collected clearly showed that government had realized way more than it budgeted for, the tax was not revised. What has happened in essence though is that while some Guyanese – mostly employed taxpayers and the poor – have had to learn somehow to struggle and live with it, others have learned how not to. Two years on, there are still several ostensibly legitimate businesses that do not pay VAT and contribute to the cesspool of corruption in the country.

So in the final analysis there is people’s power – as seen in Jamaica; and then there are people with power – some Guyanese business people.