None of President Jagdeo’s predecessors has ever taxed their people as much as he did

Dear Editor,

Growth in an economy is good for the poor; growth that is accompanied by progressive distribution of income is even better.  What we are seeing in Guyana is growth but a retrograde distribution of income.  All the saving from the reduction in debt servicing payments was distributed to the business class in the last decade, while taxes were increased covertly.  We have a situation where the working class is more taxed, their disposal income is under increased stress and their taxes are then distributed to the new business class especially those connected to the ruling class by way of more contracts. I refer to the SN article of July 11 “Some $300 million earmarked for Linden” and I asked where is this money coming from?  It is coming from the working class to pay members of this new politically connected business elite.  That act by itself is economic growth supported by an expansion of the gap between the rich and the poor.  The sweat of the working man continues to fund the wealth accumulation of the new bourgeoisie class and their political masters.  How better is the system in Guyana in 2009 as compared to Bookers Guyana in 1948?  The only difference is the Massa is no longer English and Scottish but the new mainly Indo-Guyanese business elite and their political sponsors in the Jagdeo government. Let us look carefully at the current revenue of the Government of Guyana from 1966 to 2009 so show the extent of the squander-mania in progress today; compliments of the sweat from the working class. In 2009 the Jagdeo administration raised $94,890 million in current revenue which converts to US$464 million.  We shall use this number as our benchmark year and discount all other past years to 2009. In 1966, 1973 and 1984, Burnham raised $86 million, $162 million and $600 million respectively.  In real Net Present Value US Dollars terms, this converts to US$333 million, US$372 million and US$282 million in 2009 value.  This clearly shows in 1966, that Burnham had 71% of the resources that Jagdeo had access to in 2009; 80% in 1973, and as the economy collapsed after the fall out with the IMF – 60% in 1984.

Then came the Hoyte era and I used 1987 and 1991 as his measurement years.  Hoyte raised $1,926 million and $15,970 million in taxes and fees respectively in those years.  In real Net Present Value US Dollars terms, this converts to US$110 million and US$225 million of 2009 (today’s) value.  This clearly shows that in 1987, Hoyte had 23% of the resources that Jagdeo had access to in 2009 and 48% of those resources in 1991, when the ERP started to kick in.  This clearly shows that the Hoyte regime had the least amount of real taxation at their disposal.

Then came the term in office for the Jagans.  In 1996, Cde Cheddi raised $35,117 million, while his wife raised $36,838 million in 1999.  In real Net Present Value US Dollars terms, this converts to US$343 million and US$262 million respectively.  The decline in real value in 1999 can easily be attributed to the further decline in the exchange rate and the effect of the “mo fiya” street marches. In real terms the Jagans saw 73% and 56% of the resources that Jagdeo had access to in 2009 in these two years – 1996 and 1999.

The fact remains, none of President Jagdeo’s predecessors have ever taxed their people as much as he did and the graph below clearly demonstrates this fact (see graph).  Since 1999, the current revenue stream of the Jagdeo government has been on a runaway trajectory as he orchestrated a change in the tax system to set up VAT.  I have no problem with VAT, it is a good system, but it was set up to be a cash neutral tax system from the inception.  In 2006, the Consumption Taxes and Excise Duty was $23,484 million.  In 2007, they were replaced by the VAT and Excise Taxes which reaped $36,707 million, an excess of $13,223 million. The working class footed most of these back door tax increases and the untruths are now exposed.  The fact remains that there was no cash neutrality in the implementation of VAT; it was an increase in taxation of the people – covertly.  All the workers of the land paid more taxes as a result of VAT.  So when you read the 2007 budget and it says no new taxes, remember it was one big fat lie.  Since 2007, 2008 and 2009, the Jagdeo regime never took measures to correct this anomaly to make this tax cash neutral or at least more reasonable.  The oppression continues with the VAT and Excise Tax taking $44,671 million in 2009, mainly from the poor people.

Remember in 1999, the Janet Jagan administration raised $36 billion.  In 2006 and 2009 respectively, under President Jagdeo, this had increased to $62,356 million (US$330 million) and $94,890 million (US$464 million), a 70%  and 157% increase in taxes since the Janet Jagan days and most of it came from the working class.  This was the lost decade for the working class.

It is absolutely clear that Guyana is an over taxed society both in G$ and real value terms and this is where the $300 million is coming to fund the Linden elections handouts; from the sweat of the working class, from the sweat of the bauxite workers, from the sweat of the sugar workers and from the sweat of the ordinary workers.

In conclusion these are the facts:

1.  The working class is mainly funding the several pots of cash that Jagdeo will be handing out over the next 12 months;

2.  The working class is paying for favoured businessmen to secure US$15 million contracts over more competent engineering firms;

3.  The working class is funding the expansion of the gap between the rich and the poor;

4.  The working class is experiencing their highest taxation burden ever since independence starting from 2009 and the prognosis for 2010 and 2011 is no better with Jagdeo around.

The time has arrived for a more humane Government, a more responsible and sensitive President to deal with the real issues facing the working class.  The last decade has concretised my belief that we are on the wrong path with higher crime, higher taxes, poor governance and higher corruption rates that are continuing to force the migration of our best people out of Guyana at an ever escalating rate.  Wake up oh working class, rise up against this bourgeoisie class and put an end to this covert oppression.  Time for a new direction in good governance, lower crime, lower tax rates, less corruption, better value for money spent and better strategic planning for the nation.  We have had enough of the Jagdeo style of making it up as he goes along.

Yours faithfully,
Sasenarine Singh

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