Seven months after the establishment of a three-man committee to review the country’s tax system, the administration is moving to replace one of the members—Dr Cyril Solomon—due to illness.
“We have been advised that Dr Solomon would most unlikely be able to continue,” Cabinet Secretary Dr Luncheon said yesterday.
Luncheon added that government is working to have a replacement identified for Dr Solomon so that the work of the committee could move forward. It has only met once so far. Luncheon reminded that the work of the committee ceased after Dr Solomon fell ill some months ago.
President Ramotar had in December 2011 identified economist Solomon, chartered accountant Ronald Alli, and Chairman of Banks DIH Limited Clifford Reis to constitute the panel to review the tax system. The move was based on a commitment he made prior to last year’s elections, where taxation became one of the main issues raised by the opposition during the campaign period.
Opposition leaders had raised concerns that the President put together the committee without consulting them. Further, the government had in February undertaken to facilitate a request by APNU and AFC to meet and make presentations to the committee but this never happened.
Economist Dr Clive Thomas, in a column in the Sunday Stabroek some months ago, pointed out that tax reforms are so deep-seated as to require a far different approach for their resolution than is possible through a committee made up of persons who are seen as having good working relations with the PPP/C administration over the years, no matter how skilled, proficient and experienced they are.
Dr Thomas described the current tax system as fractured, far too costly, burdensome and inefficient. He called it dysfunctional in relation to promoting economic efficiency, growth, development and welfare, because the deep-seated problems are as much political in nature as they are technical or economic. He said that the way to overcoming this is through the establishment of a broad-based National Commission on Tax Reform.
In a column in June 2012, chartered accountant and columnist Christopher Ram said Guyana’s tax policy needs to be more creative and re-configured to ensure that the average middle-income earner does not pay a higher tax rate than companies. “Equity as a canon of taxation certainly does not operate in Guyana. The absence of equity (fairness) shows itself by favouring higher paid income earners over the lower paid employees,” Ram said.
