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November 11, 2005

This tax-free bonus must be earned

EDITOR: The most indelible legacy of colonialism in an independent St. Vincent and the Grenadines is language. Vincentians are by nature monolingual – they can only communicate in English, the language of the Imperial Masters. Like it or not, the result is that the interpretation of words must be in keeping with Standard English usage. In this light it is worth noting that “bonus” is defined as “a sum of money added seasonally to a person’s wages for good performance.” {{more}}

In a publication entitled “THE FIRST 100 DAYS OF A UNITY LABOUR PARTY GOVERNMENT” by DR. THE HONOURABLE RALPH GONSALVES (Political Leader of the Unity Labour Party) an inexhaustible list of matters for action “immediately,” “swiftly,” “resolutely,” “aggressively” was provided. Among these was “Formulate immediately with Public Employees the ULP’s long-standing commitment of offering at least one-half salary, tax-free for each public employee as annual bonus at Christmas time.”

When the publication was released early in 2001 questions posed included, “Who are Public employees and precisely what is one-half salary,” also, “how does the tax-free nature of this bonus stand vis-à-vis bonus paid by private sector employers to their employees?” Since the Prime Minister’s address at the recent Independence Celebrations does not appear to have been circulated for public consumption, authenticity must be vested in the reports by the Journalists who covered the event. In this regard it is concluded that the original proposal of “at least one-half salary” gave way to a ”$300 tax-free bonus.”

Generally there must be support for any policy which appears to derive from a genuine disposition to alleviate the plight of workers. However, a politically motivated quick fix should not be the remedy.

The accepted principle that all employees are entitled to “a fair day’s pay for a fair day’s work” should prevail. Additionally employers must realize that it is in their best interest to create incentives in order to stimulate employees to strive for the optimum. If anything, the global $300 award may be more effective as a disincentive because it cannot be regarded as equitable since it is not the product of reliable assessment which relates reward directly to “good performance” and therefore rewards under-achievers in like manner as their more productive co-workers.

It is reported that the tax-free bonus will cost the Treasury $3.0 million and will benefit over 9,000 persons. On the surface neither the disclosed cost nor the number of recipients is frightening. What disturbs is that an award that should be made to good performers is applied to “each public employee.” If this means that there was 100% qualification for the award on the basis of good performance then SVG can boast of having the best-ever set of public employees all over the world for all time. However, given reality, it would be very difficult, if not impossible, to achieve an overall 50% qualification-a situation which exposes the fact that at least half the disclosed expenditure did not attract the required financial prudence.

Prime Ministers and Ministers of Finance may have absolute powers in granting tax-free concessions and in directing the whole realm of government activity but not without due regard for the propriety of the language employed.


Clement W. Iton