Thursday, 27 May 2010

Just received my pay slip and seen my tax go’re welcome Britian

The title of this blog is actually a tweet by chrisjw133 and I am grateful for the inspiration because he just reminded me why we pay our taxes.

As some of you may know already, I work in the oil industry.  Okay, I can hear to booing from here but somebody has to do it as it: at least for the time being it is the basis of our global trade and economy. I look forward to the day when this is no longer the case but I digress.  One of the benefits of working in this industry is the travel.  It is a fact that people like me see places that only come into wider focus in times of disaster or political unrest.  For that reason, I am glad that places like Angola has fallen out of the headlines and when I mention Mauritania, most people have to ask where it is.  What such places have in common however, is either low taxation or a tax system that is easy to evade.

For instance, when I worked in Egypt, it reminded me of nothing more than a giant building site.  Why were the houses unfinished?  At the top of many residences the steel that reinforces the concrete is clearly visible but the buildings are obviously occupied.  The answer lay in tax avoidance.  Apparently property tax is not payable until the building is deemed complete.  The tax is not based upon occupancy.  The outcome is that roofs remain unfinished.  Don’t tell me that the Egyptians are stupid; of course they are not.  It is just that the government has colluded with the population to reduce taxation.  It is their decision whether they want their country to look like a tip or not.  Or is it?
 In many such places the general population are not encouraged to engage in politics beyond attending the often mandatory rallies.  One such instance I personally witnessed was Equatorial Guinea.  EG, as it is usually abbreviated to, is a popular destination within west Africa for immigrants and this is despite being a dictatorship and having higher tax levels than its neighbours.   I asked some people why they had settled in EG and they told me that compared to the countries they had come from, EG was better run and that ordinary people had some chance of seeing the benefits from the nation’s wealth.  Certainly while I was in Port Harcourt there was a lot of infrastructure building going on.

It is easy to forget the benefits of taxation.  In Uganda for example, education has to be paid for; denying vast numbers of the population anything beyond the most basic levels of literacy.  There is an alternative for them however.  If the poor were to join one of the many different religious groups that are flourishing in the nation, they have  chance of getting their children educated for free.  It doesn’t matter whether it is the one of the Christian or Muslim traditions: most have representation in the country.  I was very impressed by both the grand (and recently built) Sunni and Shi’ah  mosques that are to be found in the capital Kampala.  Liberals like us are then up in arms when the Ugandan parliament, with popular support, propose to introduce the death sentence for homosexuality or when in Malawi sentences the unfortunate men Steven Monjeza  and Tiwonge Chimbalanga to fourteen years hard labour for wishing to marry each other.  After all, who do you think are teaching the bulk of these populations?  It is for such reasons that I welcome the Liberal Democrat and Conservative policy of raising international aid to 0.75% of GPD, despite the straitened circumstances we all find ourselves in and would encourage other rich nations to uphold promises that they have already made. 

Of course it is not just places like Africa I see these things.  The problems are the same across the developing world whether in Central America or parts of Asia.  Colleagues of mine live in low-tax regimes, residing in beautiful houses behind their walled compounds and armed security.  I’m not casting blame; they are merely taking advantage of the opportunities that life has presented them with.  For me though, I prefer to pay my taxes and live in north-west Europe.  Here we have the schools, the hospitals, clean water and food, the houses, roads fit to drive modern cars upon, train and air travel, relatively low levels of crime, and cheap communications.  Not all of these are paid for out of taxation but far greater numbers of people can enjoy the benefits of such things because most people do pay their taxes and that the Inland Revenue is free from corruption.  That is why fair taxation is vital to a nation’s wellbeing and the fairer the taxation, the greater the general benefit.  I welcome the Liberal Democrat input on capital gains tax for example.  Buying a flat to rent is a form of speculation and thus it is only fair that a person who starts a business up from scratch and sells it upon retirement, who has risked much and employed others, has a better deal than somebody who just hopes to benefit from the next property boom.

There is a flip side to high taxation though.  The government is responsible to me and you, dear reader, for spending our money.  Hopefully this new parliament is acutely aware of this on an individual level but, more importantly, on the grand scale too.  The past ten years has seen billions of pounds wasted on invading other countries.  Trident should be included in the latest Strategic Defence Review and, in my opinion, scrapped altogether.  Hospitals have thankfully seen cases of superbug infections fall but this was only after misplaced privatisation of cleaning services in the NHS was re-examined.  Thousands of deaths should have been prevented by ensuring basic standards of cleanliness that were laid down over one hundred years ago.   Many PFI schemes are not getting the scrutiny that they deserve.  Despite all the subsidies being paid out, how many of us are really satisfied with the state of our railways?  I could go on and on.   

The point is though I just got my tax bill and you really are welcome to part of my earnings Britain.  Spend our money wisely though, because the British people are looking to see where the money, our money, is going.


Linda Mason said...

Agreed about paying it Martin. Most people do have a grumble about paying taxes but deep down know that it is a very necessary evil if we are to live in a country that has decent services.

When I worked for the dark side it used to make me weep at the lengths that those who did have money went to to avoid paying taxes. I dealt with more than my fair share of non-doms and what they get away with makes me feel physically sick; they live in the UK permanently and yet usually because they were born elsewhere and maintain what can only be described as tenuous links to that country, they pay virtually no income or capital gains tax in the UK.

My other gripe is fair taxation. I loathe VAT as an example of a very unfair tax in terms of the ratio of income paid by those on lower incomes to those who earn lots more.

Good usual :-)

Martin Veart said...

Totally agree with VAT Lindi. a very unjust tax. Just who was that who introduced it again? Slips my mind ;-)
And Non-Doms. Again, I wonder who were the main beneficiary on that one?

Anonymous said...

Greetings from sunny LA, a place that cannot function without the oil industry.

I think what people find is that in a lot of third world countries, human labour is cheap, and so they can have a small army of servants, but anything involving infrastructure or capital expenditure (computer, electricity, UPS to run it etc) costs up to twice as much. I also like being able to go for a walk without an armed guard.

I thought Port Harcourt was in Nigeria?

DeeDee Ramona said...

Um that was me, DeeDee Ramona.

Martin Veart said...

You are right DeeDee. I meant Malabo. Thanks. Can't remember half the places I've been to!

Linda Mason said...

Didn't VAT replace the old purchase tax? I know I'm old but not even I remember the introduction of VAT!

Do you think the CGT reforms will go through? Looks dodgy at the moment....

Martin Veart said...

I'm pretty sure that VAT came in with Thatcher's first government (Geoffrey Howe rings a bell) and although there were some older purchase taxes, they were on individual areas and not the all-embrasing blanket that VAT has become. In fact I still remember the Conservative PPBs telling us that VAT was fairer because it was a tax on what one spent, not what you earned. In other words, don't spend: pay less tax. Of course, the problem is if you don't have disposable income, you have to spend.

The CGT should go through. The loss of David Laws is a blow though. The Telegraph revelation was more of attack on the policy than on him but by 2006 he knew the rules had changed and he did not change with them. So even though the tax-payer is not out of pocket, they could still have Laws on that point.

Linda Mason said...

Sorry Martin but multi millionaire Laws did not need to claim that rent in the first place. If his reason is as he says it is; that he wanted to keep his sexuality and private life private, then why claim at all? Seems rather a weak excuse from someone who didn't need the 40K a year in the first place. I have no sympathy whatsoever.

Belle said...

As a traveler, seeing other county's physical condition may somehow answer whether their taxes were put in its right place or not. But it is all more than that. Taxes should go to the people – whether in structure or in services, or in improving their lives. I've seen the collectives of beauty and devastation in just one country. I've seen progress and tall structures that have a dirty swamps as back drafts. Luckily, in some ways, America is quite different. Taxes in outsourcing payroll scheme will benefit the employer and the employee as well. As long as they were unemployed for a certain given date. And I am hoping that this will really reflect on my payroll. Nevada industries look fast-growing and hoping that we too in the neighboring states will benefit on that newly signed Act. And from tax talk I thwarted myself to payroll. Yes – because they are conjoined entities that run in cycle. You said it, the payroll-tax cycle,”. Yeah, talking about it again – everybody's favorite – the payroll.
statesmen said that it will surely benefit us and why not trust him and wait what happens?

First time to read an oil man's writing and it was purely greatness and good writing.