CHRISTOPHER Ram, with his now customary anti-Government obsession, has accused Minister of Finance Winston Jordan of illegality/invalidity in the remission/“waiver” of taxes on retroactive salary increases for public servants/public officers (see “Regulation published by Finance Minister to waive taxes on public servants pay increases is invalid” SN November 25, 2019) Godfrey Statia, Commissioner General, GRA submits that the remission is valid as authorized by statute (vide “Minister Jordan’s decision was guided by Section 105 of the Income Tax Act Chapter 81:01”; “Tax – Free backpay legal” Guyana Chronicle, Thursday, November 28 2019). Godfrey Statia is manifestly right. Christopher Ram is patently wrong.
First of all, I would submit to Mr. Ram that the National Assembly under our constitutional architecture has no power “by the passage of primary legislation … to make any payment exempt from tax” (here I am quoting from Ram’s letter). That power is, exclusively, the constitutional province of PARLIAMENT in contradistinction to the National Assembly. The National Assembly is not Parliament; the National assembly is that constituent part that inter alia, passes Bills; the other constituent part of parliament being the President (who assents to Bills when passed) (see article 51). I have seen this confusion as between the two bodies in the writings of another prominent letter writer.
It is trite constitutional law, that no Bill passed by the National Assembly can become “primary legislation” (Ram’s terminology; I prefer the simplicity of the word “Act”) until and unless (provisions as to overriding the President’s veto, aside) that Bill is assented to by the President. But, I suspect that Ram’s seeming congenital angst for the David Granger headed Government, blinds him from that constitutional truism and makes him delusional about this President’s indispensability in statute law enactment/making. And, I would observe, en passant, that by his vote buying rhetoric (his words are “violate any law…bribe any group of voters”,) and the imputations/ innuendo of criminality such words are capable of bearing in the law of Libel, Ram dances on thin ice [see Janet Jagan And Another v. Linden Forbes Sampson Burnham (1973) G.L.R 203 a decision of a strong Bench of the Court of Appeal.]
Second, (and herein lies the crux of my argument) while I agree with Ram (but I prefer the statutory basis of section 20(1)(b) of Interpretation and General Clauses Act, Cap 2:01) that it is an “elementary principle … that the delegate … can only exercise any power consistent with the primary legislation”, Ram has not shown, and cannot show, by any reasoned justification, that in pith and substance, Minister Jordan’s made Regulations No. 11 of 2019 is inconsistent with the Income Tax Act, Cap 81:01 wherein section 105 specifically (not generally) confers, by delegation, tax remission power on the Minister which he exercises and exercised, in his discretion in making Reg 11/2019. So, Ram resorts to an abstract disquisition of “elementary principles” without the slightest endeavor to show by condescension to the particulars of the Income Tax (Special Provisions) Regulations (No. 11 of 2019), how by a process of interpretation, any inconsistency (as he pretends to argue) has happened.
He cannot. So, he pedantically embellishes his specious, politically motivated arguments, by reference to the “Financial Administration and Audit Act” (sic). You see, having made reference to the FA & AA, he then, in the very next following paragraph, by a somewhat inarticulate and inobvious (a non sequitur) remarkable step in his argument, writes thus – “In other words the Regulations made by Mr. Jordan are invalid … any power …. they seek to impose is illegal”. So, here he is leap frogging from the clearly unnecessary reference to the FA & AA, (the Minister did not act under such legislation) to the unreasoned, specious conclusion of invalidity and illegality.
Editor, I agree entirely with the Commissioner General’s submission, and with the reasons he proffers (as he refreshes Ram’s memory about section 105) that “Section 105 did not at any time (in 2003 or 2005) refer to Section 13 of the Income Tax Act but conferred a discretion in the President and then the Minister to remit tax … Ram has completely ignored section 105, and may be essentially ignoring the amendment conveniently”.
Editor, that was the state of their respective arguments until Counsel in a subsequent letter (exercising his right of reply) has contrived to disembarrass himself from the contempt to which his omission to even mention much less cogitate about section 105 had exposed him, by first, inexplicably , dis-acknowledging the Commissioner General’s direct adumbration about section 105 (even the caption in the GC letter gives the lie to Ram’s dis-acknowledgment); and he also has introduced a new, fresh argument, which while admittedly true in theory, does nothing to support or validate his invalidity/illegality argument predicated on his main supposition that Reg. 11/2019 is inconsistent within the Income Tax Act.(see “There is an ocean of difference between exemption from tax and remission” S.N Friday November 29). It is this reply letter that has prompted mine even as I hold no brief for either the Minister, or C.G. Some obvious irrelevancies aside, Ram writes “In the tax world there is an ocean of difference between exemption and remission….To have a remission one must first have a liability which is impossible if as the Regulations state, the income is exempt.”
Taken as a general proposition of tax law, it is difficult to disagree with that. But put in context Counsel knows that Reg. 11/2019 is not just para.3 (“There shall be exempt from the tax- …”). Reg. 11/2019 has in all three paragraphs (para 1. Speaks of” …Regulations for the waiver of taxes…”) the word “Waiver” being a misnomer for remission and the recitals speaks of “… powers conferred upon me by section 105 of the Income Tax Act Cap 81:01…”. It is the WHOLE of Reg. 11/2019 which has to be interpreted, not just para 3. in isolation, for any principled determination as to its (in)validity Does Ram not know this! To be clear, I make no excuse for the flippancy with which para 1 and 3 are drafted. vis-a-vis “waiver” and “exempt”
Be that as it may, Reg 11/2019 is plainly not ultra vires the Minister in terms of section 105. Interpreted as it must, as whole, its purpose is plain and unambiguous- the remission of income tax. And in any event, since Reg 11/2019 is not, of course, some charging provision (which requires a strict construction) the legal maxim of interpretation that applies is: ut res magis valeat quam pereat (i.e. it is better that the thing be valid than perish)
Third, and finally, I would briefly observe that Ram’s notion of illegality (as distinct from his other argument of invalidity) is an outrage. The delegability, by parliament itself of its relief from tax authority (as happened in this Tax free backpay matter) is well established in tax laws (see the instructive case of Revere Jamaica Alumina Ltd v. AG (1977) 26 WIR 486).
I end with this: the esoterics of revenue/tax law, and political diatribe, makes for a toxic mix. Political rhetoric can be trifled and fiddled with; revenue law (learning about which I would yield only to a few in this country) cannot. Christopher Ram, while deserving public servants backpay is pending, has fiddled. Minister Winston Jordan has in this Government’s “tax -free backpay” decision – process, legislated as a member of the Executive, with all due constitutional, and delegated, probity and propriety.
Maxwell E. Edwards