Understanding the Law
March 31, 2006
Levying of taxes

In all organized societies the citizens have been required to pay taxes whether in kind or with the currency of the time to the governing body or ruler of the country to support the services and infrastructure that have been provided for their use. The levying and collection of taxes is an old practice. The Bible tells of Mary and Joseph going to Bethlehem to pay taxes when Mary went into labour and gave birth to her son Jesus in a stable. Many other persons had gone there to pay their taxes so Mary and Joseph could not find a room in an inn. While Jesus was carrying on his mission he was challenged by a reluctant tax payer on the issue of taxes when Jesus informed him that he must give to Caesar the things that are Caesar’s and to God the things that are God’s.{{more}}

The aim of every government is to find a way of levying taxes that are not too burdensome on its people especially the poor. In the past unreasonable taxes have had to be removed because of their non acceptance by those who were taxed. The British Government had to quickly withdraw the Stamp Act that was imposed on the reluctant American colonists because they would not be taxed by a government that was thousand of miles away. Their slogan, “no taxation without representation” has implications today in the Western world and only duly elected governments have the power to impose and collect taxes from their citizens.

By virtue of Chapter 310, Finance (Provision for Payment of Taxes) Act, revenue has been raised by successive Governments by way of consumption tax, excise duties, land and income tax among others. Land tax is perhaps one of the oldest taxes. Consumption tax became important with the production of goods for trading. Consumption tax is that which is charged pursuant to Chapter 301 of the Laws of Saint Vincent and the Grenadines. The tax is imposed on certain goods imported for local use and those that are locally produced or manufactured on a commercial basis. This tax is expected to be replaced by value added tax (VAT) in the near future. The collection of the consumption tax is under the supervision of the Comptroller of Customs and Excise Department.

Income tax brings in a substantial part of the government’s revenue. Income tax is a direct tax that is charged on a person’s personal income, that is the money that a person earns from working with an employer or for self. Chapter 312 of the Laws of Saint Vincent Revised Edition 1990 amends the Income Tax Act and since 1990 there have been several amendments. The tax year for St. Vincent and the Grenadines runs from April 1st to March 31st and everyone is expected to complete an income tax return by March, 31st. This is a way of presenting all income earned by the individual throughout the year. Non completion attracts a fine of $20 for each month after the return is due.

Even though the collection of taxes has been an old practice there are persons who would always try to avoid or evade taxes. Section 23 of the Income Tax Act provides for action against those persons who carry out transactions that are designed to avoid liability to taxes. Tax evasion is illegal and occurs where a person willfully circumvents the tax laws so as not to pay his or her taxes.

• Ada Johnson is a solicitor and barrister-at-law.

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