It has been two years since Prime Minister Dr Keith Rowley announced his intention to seek his cabinet’s agreement to cap the motor vehicle tax exemption enjoyed by parliamentarians and other public officers at $350,000. He made the statement in October 2020 as he wrapped up his contribution to the 2020/2021 budget debate.
Nine months later, when questioned by the media about the status of that proposal, Energy Minister Stuart Young said it was still before the Cabinet but not at the “forefront” of discussion. Since then, the matter appears to have slipped even further down the cabinet’s agenda given the government’s absolute silence.
As it stands now, MPs, ministers and other public officials are continuing to benefit handsomely from unseemly cushiony tax breaks while the public, already reeling from price inflation, brace for anticipated subsidy reductions and new property taxes.
With last week’s arrest of David Lee, deputy political leader of the opposition United National Congress, on charges of fraud and conspiracy to defraud in relation to his purchase of a high-end Mercedes Benz car, the issue of tax exemptions is back on the public’s agenda with a bang. The car purchased by Lee is reportedly valued at $2.4 million with a tax relief of $1.4 million. Predictably, partisan politics is dominating the narrative with Lee’s arrest having triggered a counter-attack by opposition MPs against government minister Faris Al-Rawi regarding his sale of a tax-exempted Porsche Cayenne SUV.
Lost in the process are fundamental questions about the public value of vehicle tax exemptions and other tax breaks granted to office-holders; the scope for abuse created by legal loopholes; and the value system underpinning the regime of perks for those who offer themselves as servants of the public.
There is something very unnerving about watching these “servants of the people” driving through depressed communities dodging pothole after pothole in luxurious vehicles that most, if not all, would have never acquired if they had to pay the taxes levied upon the rest of the population. The eagerness with which almost all grasp the entitlement to tax breaks without any sense of irony to their pledge of public service is, to put it mildly, cringe-worthy.
As the debate heats up, some have suggested that abuse could be eliminated by replacing tax exemptions with travel allowances while others have suggested that the exemption apply to only one vehicle per five-year term. There may be many other ideas out there. However, the likelihood of a serious review is complicated by MPs’ conflicted position as beneficiaries of the exemptions.
In the absence of strong public opinion, politicians are unlikely to be motivated enough to review any financial arrangements that benefit them, nor might they be amenable to closing loopholes that facilitate their pecuniary interest. The common argument is that the dignity of their office requires they be kept to a certain of standard of living which, for some, can be a huge leap from where they were before taking an oath of public service. Hoping for change might be wishful thinking.
