ID: INTERACTIVE DIALOGUE
DAVID MULLINGS
Sunday, May 01, 2011
THE president-elect of Haiti, Michel Martelly, recently visited Miami to engage the sizeable Haitian Diaspora in the rebuilding and development of the country. My fellow board member, Marlon Hill, the representative for the Southeast USA on the Jamaican Diaspora Advisory Board, shared a Miami Herald article with all USA board members via e-mail that quoted President-elect Martelly sharing an idea that I believe can be applied to Jamaica very easily (read the article by going to http://bit.ly/jaremit.
He proposed that a US$1 charge on every US$100 of remittance and a 5-cent levy on every minute of telephone calls would go into an education fund, raising a total of US$86 million per year. "The Diaspora will be able to send 860,000 kids to school for free and change their lives," was his reasoning.
  GOLDING… seemed receptive to the idea of the Diaspora helping to fund education  1/1  |
Jamaica already collects a levy on international telephone calls, putting that money into the Universal Access Fund which goes towards the national e-learning project focused on enhancing education through the use of information technology (such things as computers in schools, training sessions for teachers, etc).
However, if Jamaica were to implement the Haitian idea of the US$1 charge per US$100 in remittances and put it into a "Universal Education Fund" focused on supporting the education system, based on the US$2.2 billion sent each year to Jamaica, the Government would raise a total of US$22 million or J$1.88 billion per year!
I was invited to be in the audience at this past Wednesday's broadcast of Jamaica House Live with Prime Minister Golding and was able to present the idea to him before he went on air. He seemed receptive to looking into the idea and I hope that the administration will move quickly to evaluate its feasibility.
Some Jamaicans in the Diaspora often talk about the amount of remittances we send back in total, but I keep reminding them that the money is sent to relatives because they love their relatives, not because they love their country. Moreover, the money does not go to the Government, it goes into the economy.
This US$1 levy would be an easy way for a segment of the Diaspora to contribute directly to the development of the country for which they profess so much love. I do understand that a number of people would be concerned about how the money will be used because both political parties in the past have used money from specific funds for other purposes, and I agree that transparency will be key.
The Diaspora will buy into the idea if and only if they do not suspect misuse or mismanagement.
A key question is, who pays the US$1 per US$100, because if the recipients in Jamaica now had to pay the levy, they would in essence be paying additional taxes to the Government. For this reason I believe that the levy should be paid by the sender. Senders are more likely to be able to afford the extra US$1, especially based on the recent Bank of Jamaica Remittance Survey 2010 giving us a much clearer picture of who actually sends remittances.
According to that survey, we know that approximately 16 per cent of remittance senders are nurses, followed by 5.3 per cent being construction workers, 3.6 per cent being business owners, 3.1 per cent are teachers and the percentages decline for other groups.
It may turn out that unlike the telephone levy the remittance levy will have to be voluntary and individuals can opt to pay the fee or not. Those individuals who decide to pay the fee would certainly be able to give back to Jamaica in a new way very easily.
One of the biggest issues, however, is that this remittance levy would still exclude a significant number of Overseas Jamaicans. I would be left out because I do not send remittances to anyone, but I would still be interested in contributing in some way. Surely, a mechanism could be created to allow donations to the fund as well (or we could finally get the Diaspora Education Bond up and running).
Finally, some people in the Diaspora will certainly raise the repeated demand for voting rights. Many have used remittances as the basis for such an argument, but taxes are quite different from remittances. This time, however, they would actually be paying a tax and the well-known slogan of "no taxation without representation" would certainly be invoked.
Jamaica has no law preventing anyone in the Diaspora from voting as long as they are registered voters, which means they have to meet residency requirements. One can fly to Jamaica for elections and vote, with no issues right now. So many people in the Diaspora do in fact have voting rights.
Should those paying a remittance tax who are not qualified to register to vote be afforded some representation via amendments to the Constitution? That is for another column, but I look forward to the various positions being posted on Facebook and Twitter.
The key is that the Government of Jamaica can raise J$1.8 billion per year right now without taxing a single Jamaican in the island while allowing the Diaspora to give back in a meaningful way. The USAID refers to this as Diaspora Direct Investment and I think that it is an idea that should be researched.
David Mullings is the Future Leaders Representative for the USA on the Jamaican Diaspora Advisory Board. He is on Twitter attwitter.com/davidmullings and Facebook at facebook.com/InteractiveDialogue
Read more: http://m.jamaicaobserver.com/columns/How-the-Gov-t-can-raise--1-8-billion-annually-without-taxing-a-single-Jamaican_8725663#ixzz1NHMflvSC
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