So, it seems an increase in gas tax is to be used to help plug the Budget gap. But, as with all indirect (consumption) taxes, it would be regressive, hitting hardest those on lower incomes who have little or nothing left over each week to save or invest.

Many lower-income workers are already paying more than their fair share of taxes because those on PAYE cannot avoid income taxes.

On top of all this, the Govern-ment has told all public sector workers (many of whom are on low incomes) that they must take a cut in real pay - that is the buying power of their wages reduced by inflation which has been around 20 per cent this past year.

Taxing investors

I have already suggested that the group who should share the burden is local investors in government-debt instruments.

Not by a negotiated rescheduling, which would take much too long, but by imposing a cap on interest payments. Such unilateral action is no different than that being imposed on workers and consumers, as described above.

If this, too, requires capital exchange controls, then so be it. If people cannot move so easily to places of higher income, then why should those investment funds be allowed to do so? As with Cash Plus investors, they have enjoyed a relative bonanza for too long - at taxpayers' expense.

Income-tax threshold

But I also believe that tax revenues must be increased. Many in the informal sector escape direct (income) taxes, so, perhaps, indirect (consumption) taxes such as gas tax, are one answer.

To avoid adding hardship to those on low incomes already contributing through PAYE, any increase in gas tax should be complemented by an equivalent increase in the income-tax threshold.

To avoid those on higher incomes benefiting from such a threshold increase, we also need to change the flat rate of income tax from 25 per cent to a sliding scale, perhaps from 25 per cent to 50 per cent.

And for those on incomes below the tax threshold, the PATH programme must become a more accessible option.

At the higher end, much more must be done to collect taxes from the wealthy, and from businesses who live too much on tax allowances.

Can we be provided with more detail on the taxes not being paid, since we are near the bottom of the world on this? And why the TRN system, after more than 10 years, is still not effective?

I am, etc.,

PAUL WARD

pgward@cwjamaica.com

Kingston 7