IMF urges Haiti to collect more taxes

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Yanique_

IMF urges Haiti to collect more taxes

Post by Yanique_ » Wed Jun 21, 2006 2:21 pm

By Joseph Guyler Delva
PORT-AU-PRINCE, Haiti, June 18 (Reuters) - The International Monetary Fund has urged Haiti to collect more taxes to help fund poverty reduction as part of a new economic-reform program.
Anoop Singh, the IMF's director for the Western Hemisphere, said Haiti's newly installed government needed to fight massive tax evasion to boost revenue intake in the poorest country in the Americas.
"Many people in Haiti who owe taxes don't pay them. So there is a need to raise the ratio by making those who owe taxes pay them," Singh told a weekend news conference in the Haitian capital.
"That's how you get resources to finance anti-poverty programs," he said.
Singh arrived in Port-au-Prince on Friday on a two-day visit.
He held talks with President Rene Preval, Prime Minister Jacques Edouard Alexis and various financial and monetary officials to discuss a three-year economic-reform program aimed at reducing poverty while paving the way toward long-term economic stability in the Caribbean nation.
IMF officials called on authorities to spend more on social programs to impact the lives of Haiti's impoverished masses.
"We are trying to help develop a framework that will allow this to be done while keeping inflation low," Singh said A team of IMF staffers led by Przemek Gajdeczka, an adviser who has overseen Haiti for more than three years, is expected in Port-au-Prince next week to start technical discussions with the government on a medium-term economic program that will potentially be supported under the IMF's Poverty Reduction and Growth Facility (PRGF).
The PRGF would be a key step for Haiti in qualifying for debt forgiveness under the Heavily Indebted Poor Countries Initiative and, more generally, galvanizing economic support from the broader international community, IMF officials said.
The new structural reform program will also focus on raising and better targeting social spending, strengthening economic governance and ensuring economic transparency, while improving Haiti's overall investment climate, the IMF said.
The IMF said Haiti's performance under its so-called Emergency Post-Conflict Assistance program, approved in October 2005, has been broadly satisfactory.
"Macroeconomic indicators have strengthened and progress has been made in implementing key structural reforms. Net international reserves have increased substantially and the gourde (the Haitian currency) has been broadly stable," the Fund said. ………………………………………………………………………………………………………..
As the saying goes: god helps those who help themselves….
I think it time Haiti stand on it own feet, for years the country has been relying on foreign aids without making any strong structural plans to become economically stable. Haiti's wealth is spread out among a small group of people; it's not that difficult to get the wealthy to pay their taxes.

Gelin_

Re: IMF urges Haiti to collect more taxes

Post by Gelin_ » Wed Jun 21, 2006 3:34 pm

[quote]...Haiti's wealth is spread out among a small group of people; it's not that difficult to get the wealthy to pay their taxes.[/quote]
On the contrary, it's next to impossible for the state to even get a bite.

gelin

Yanique_

Post by Yanique_ » Thu Jun 22, 2006 9:29 am

Call me naive, but if the government of Haiti is unable to collect taxes from the wealthy they are incompetent, or they simply refuse to ruffle anyone's feathers. Regardless, desperate times call for desperate measures; they can turn to the IMF for help…

There's something called OFAC (office of foreign asset control) U.S. based government office which controls all assets of foreign individuals. With the support of the IMF, they can freeze the assets of many individuals who refuse to pay their taxes. I know it was done in past -I can't remember the reason why- but several years (maybe 8-10 years) ago the OFAC file consisted of mostly Haitian people. I work for a very large International Bank. We have a small office in New York, I get to see just about everything. OFAC froze many accounts back then. If the IMF wants to help Haiti collect it taxes, they should seriously consider doing that again.

Yanique_

Post by Yanique_ » Wed Jun 28, 2006 1:54 pm

Haiti's government can't collect taxes from people who live below the poverty level. It would be absurd; I was under the impression that the IMF wants Haiti to collect taxes from the business owners. People who actually have money not overworked and underprivileged masses.
Haiti can improve on its present financial condition; the government can collect higher taxes from those who own luxury homes and also homeowners who are foreign citizens (that includes some members of my family). Eliminating free medical school for those who can afford it. They should make scholarship available to those who are qualified but unable to pay. Entrance to medical school should not be based on nepotism, it should be determined by a person capability. There are many Haitian doctors in the U.S. and Canada who took advantage of free medical school in Haiti and never practice in Haiti or give back anything. Instead of providing free medical schooling to privileged few, they should focus on educating the young people. Haiti's future depends on them.

Michel Nau_

Post by Michel Nau_ » Wed Jun 28, 2006 5:29 pm

G. Delva Wrote: [quote]Haiti's wealth is spread out among a small group of people; it's not that difficult to get the wealthy to pay their taxes. [/quote]
Yanique wrote: [quote]Call me naive, but if the government of Haiti is unable to collect taxes from the wealthy they are incompetent, or they simply refuse to ruffle anyone's feathers. Haiti's government can't collect taxes from people who live below the poverty level. It would be absurd; I was under the impression that the IMF wants Haiti to collect taxes from the business owners. People who actually have money not overworked and underprivileged masses.[/quote]

Avan ke nou komanse deba sa, an nou retire mo “wealthy” sa ladan.
Se pa wealthy selman ki pou peye Leta tax, se tout pep a larondbade. Ke w rich ke w pov, tout moun fet pou peye tax si w dwe Leta tax. Bondye di "Bay Sèza sak pou Sèza"
An nou kle sou bagay sa dabo avan ke nou kontinye. Gen 2 pati nan koze sa Leta ki gen dwa mete tax sou moun, e Sekte prive a ki pou peye tax li.

It's not that the Private Sector refuses to pay taxes. That is false!
When the Taxman hands someone a tax bill or you pay it, or has limited time to dispute it.
If someone doesn't pay, he or she will go straight to jail for refusing to pay what is due to the State. We are not watching “The Tea Party” here.

When a member of the Private Sector goes to pay his tax bill, let say $100,000.00 the problem is, he may go to the tax collection office; pays and shows to everyone who wants to see that his tax bill has been paid with a big stamp on in “Paid in Full”.

What the public doesn't see is where the money goes to? The State may get 50% (if lucky), and the other 50 is shared under the table between the government's employees and the Private Sector.

The next scenario is even worse. Tax evasion is illegal activities that reduce the tax bill to a minimum or almost nothing. These activities are and not limited to corruption, black marketing, border crossing, counterfeit shipping documents, stealing etc.

Now, G. Delva , do you still believe that “it's not that difficult to get the Wealthy” to pay their taxes?
And Yanique do you still believe that the government is incompetent?

Bagay yo pa fasil jan Guyler di a, e government pa inkonpetan jan w di aYanique.

Suppose that the State put a Tax Collection Agency together with thousand of Accountants, and Lawyers with the Headquarter in Port-au-Prince, and thousand of local offices in the provinces to go after the Private Sector.
There is no guaranty that they will be successful.
There is no guaranty that they will collect 75% of what is due to the government.
After a costs and benefits analysis, this idea may be counter productive.
This Agency could be a white elephant, a financial burden, and could eat up all the revenues. This money that the State could use to support social programs for the People would not be there.

What is the answer??

Map kap vini avek li yon lot le.

Michel

Tidodo_

Post by Tidodo_ » Thu Jun 29, 2006 6:26 am

[quote]Se pa wealthy selman ki pou peye Leta tax, se tout pep a larondbade. Ke w rich ke w pov, tout moun fet pou peye tax si w dwe Leta tax. Bondye di "Bay Sèza sak pou Sèza"
An nou kle sou bagay sa dabo avan ke nou kontinye. Gen 2 pati nan koze sa Leta ki gen dwa mete tax sou moun, e Sekte prive a ki pou peye tax li.

It's not that the Private Sector refuses to pay taxes. That is false![/quote]


Michel,

It has been a while since I left Haiti. But when I was working there, between 1973 and 1983, poor employees of major companies, such as the one I worked for, were compelled to pay all of their taxes. Those major companies, including those branches of foreign companies accustomed to pay taxes in their home countries and aware of the penalty for not doing so, found it too risky to play the Haitian game of evading paying them. The companies' management or personnel would make it an obligation for all employees, management and clerical, to pay the legal amount of taxes on the salary and compensation they pay to them. I knew it because at one time part of my job, with that of other officers, was to enforce those rules. The result at the time was that it was up to good corporate companies and citizens to pay their taxes.

The problem is that there is no good enforcement of tax rules in Haiti. As I just illustrated, it is left up to good citizens or corporations to comply with them. The rest just does not pay or does not declare all their income. Even if there was good enforcement, you would still have the bad apples in the private sector who would try to evade them. And, we are not even talking about whole sectors of economic activity in Haiti, the illegal ones, who never fall under the radar screen of the tax department, Bureau des Conributions.

I am curious as to how you arrived at the conclusion that:" It's not that the Private Sector refuses to pay taxes. That is false!" Normally, people, everywhere, don't like to pay taxes, unless forced to. If you want to collect them, you must have good enforcement mechanisms. Unless things have improved in Haiti since I left and I missed noticing those improvements, I am not aware of good enforcement mechanisms there.

Again, when I was living in Haiti, affluent people would come to the Bank and would never stand in line, despite the fact that it was unfair to those in lines, primarily poor people with no social connections. These affluent people were representatives of the same ones that you called the private sector. I could not see in them that model of good citizenry that was implied in your statement above concerning taxes. While the statement above aginst the whole private sector refusing to pay taxes may be too generalized, to claim it an absolute "false" is also too generalized.

J-M.

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