Introduction
There is considerable irony to the fact that, as I pointed out last week, less than six months after the Poverty Reduction Strategy Paper (PRSP 2011-15) had highlighted the ongoing Tax Reform Action Plan (TRAP) in force since 2003 as a “tremendous success,” the incoming minority PPP/C administration, in one of its very first deliberate post-elections economic policy actions in December 2011, has established a Tax Reform Committee! This action puts the claim of “tremendous success” into proper perspective, and perhaps confirms the view held by most thoughtful Guyanese that today’s tax system is indeed, as I claimed last week, “in urgent need of deep-seated reforms.” This ironic situation may well be a classic example of an incoming political administration of the same political ilk as the out-going administration, being blindsided by the foolish and foolhardy actions and statements of its predecessor.
In my previous column (January 15), I had challenged the wisdom of establishing a Tax Reform Committee to pursue this objective. My main concern is that this approach frames the task of tax reform in a far too ‘technicist’ way. Experience shows that successful tax reform in circumstances like those in Guyana requires both a
