Even though he expressed support for the new 30 per cent tax bracket for people earning $1 million and more per year, economist Dr Patrick Watson said yesterday that he was unsure whether the Government will be able to collect the projected $560 million in tax revenue from high-income earners.
The former senator and director of the Sir Arthur Lewis Institute of Social and Economic Studies at the University of the West Indies said it may be easy for some independent self-employed professionals to hide their earnings using legal channels.
“There are legal ways to make sure that money don’t appear and they will find the best lawyers to do it,” Watson said in a telephone interview yesterday.
He said independent self-employed professionals such as specialised doctors/surgeons, high-end attorneys, and consultants employed with energy companies as well as nationals employed with foreign-based firms may be among those whose chargeable income exceeds $1 million per annum, but he said these professionals could easily escape the taxation.
“These are independent professionals and they are sure to find legal loopholes. I am not too sure that Government will catch these people because they are the ones who will have to declare their income,” Watson said.
Saying he in no way fell close to that income bracket, Watson added, “The easiest people to catch are those like myself who work for an employer who declares my income. Businessmen are not likely to have the same concerns as I do because they can do things before they declare their income. They can show the Board of Inland Revenue their income and I am not sure that their taxes will be a large amount,” Watson added.
Watson said he was in favour of taxing the rich, but he hopes that the Government has done its homework to establish projected figures.
He said Government may have gone too high in its chargeable income bracket to make the new taxation profitable.
Asked what figures he would have recommended, Watson said he could not make an estimation as he did not have the research. (RDS)