Taxation and skills retention

Over time the private sector has invested heavily in programmes designed to equip its workforce with the required skills to enable them to function effectively. The state pursues its own regimen of training. Many, perhaps the vast majority of those skilled and semi-skilled workers in both sectors who have benefitted from such training over the years have departed Guyana for greener pastures, mostly in         the Caribbean and North America.

Outward migration has not only resulted in the persistence of scarce skills but has also placed an additional burden on those trained workers who have either chosen to remain at home or have not been afforded the opportunity to migrate.

Scarce skills may result in higher salaries and other incentives for the few workers who are left behind but even these are not believed to be sufficient to compensate for the additional effort which they are    required to make. Higher salaries and incentives are not sufficient to buy commitment though one might have expected that the opposite would have been the case.

The extent to which an employee with a family of six is prepared to countenance a situation in which he or she must pay one third of his or her salary in taxes in not one that has been given nearly enough thought by observers. At the level of officialdom the focus on the numbers associated with establishing a threshold for paying taxes disguises the actual consequences of being constrained by high taxes. Income Tax. Tax regimes in most countries allow people to claim  benefits for their spouses and children.  A tax exemption of a maximum of $50,000.00 for a family of even modest size surely challenges the fairness of the entire system. More than that it has implications for the ability of the worker to adequately support his or her family, to adequately take care of their physical, social and intellectual needs for his or her commitment to the job is perhaps not a matter that sufficient account is taken of.

An equation that allows an employed family person to claim at least one half of the threshold for their spouse and one third of the threshold for each child as long as they are being maintained by their parents, is generally considered to be reasonable.  That way, we will be doing a bit more to encourage our more members of our skilled work force to remain at home.