CARNIVAL AND THE TAXMAN

Carnival which falls this year on February 7 and 8 is a multi-million dollar industry set to earn relatively large sums for the major players, but is the Inland Revenue Department geared to demand from the principals what should be its fair share in corporation and other taxes? What mechanisms have been put in place by the Inland Revenue Department to assess the earnings, generated by Carnival, of bandleaders, costume designers and/or producers, music arrangers, pan tuners, mas’ truck owners and calypso tent managers?

Let us not fool ourselves — Carnival is big business. A large band can have somewhat in excess of 5,000 members, with costumes, not including those of Kings and Queens, costing from $1,000 to $6,000. In turn, banks are offering today special loans to persons wishing to play in Carnival bands. Each band has sections or subdivisions and the larger bands have section leaders, persons who are producing subdivisions of bands, some of whom (the section leaders) are estimated will gross between $50,000 and $60,000.

The section leaders will provide persons, who have registered with them to play in their subdivision and who require bank loans to pay for their costumes, letters to their respective banks. Payments for the loans will be then deducted monthly from their salaries. And since the cheques representing the value of the individual loans are often made out to the section leader this system makes it that much easier for the Inland Revenue Department.

Despite the tremendous liquidity in the system today the fact that banks are prepared to come in to facilitate individuals wishing to purchase Carnival costumes suggests that the interest incomes the banks expect to earn from the exercise can in no way be insubstantial. We are not looking merely at a loan for an individual costume, but rather at the far larger business represented by loans for hundreds of costumes. And even as it demonstrates business acumen on the part of banks, it highlights the tremendous business opportunities there are not only for bandleaders in the bringing out of an entire band, but for section leaders or franchisees as well. Surely, the hierarchy of the Inland Revenue Department are witnesses to the tax revenue implications of this exercise.

We noted earlier that Carnival was big business. Nearly every street in Woodbrook has a section leader, or franchisee of a large band, and the streets roll easily off the tongue, for example Rosalino, Belle Smythe, Gallus and Cornelio. In turn, Woodbrook’s main roadway, Ariapita Avenue, plays host to several section leaders. But Carnival is not only about the production of costumed bands, large, medium or small. It is about steelbands and their tuners and arrangers whose incomes, particularly when their skills are greatly in demand, are not inconsiderable.

In turn, the expertise of a few is in demand the year round and the earnings of these, come Carnival, provide the base for the assessable income in which the taxman should be concerned. Then there are the dance promoters and mas’ truck operators. The dance promoters would be earning income linked to the 2005 Carnival from as early as this, the first week in January. Admittedly, save in the case of all inclusive fetes, it may be not that easy for the Inland Revenue Department to assess income, as many patrons may be paying at the door. Nonetheless, appropriate accounting systems can be devised and put in place.

Many truck operators do not have to wait until the actual days of Carnival to begin earning the extra money which the season provides, but would have had contracts linked to the two-day festival from as early as the start of the Panorama preliminaries. The returns of calypso tent operators, based largely as they are on ticket sales — money made from the sale of drinks are additional — should be relatively simple for Inland Revenue to determine. It is time for the country to share, via a sensible approach to taxation, in the long proclaimed economic benefits of Carnival.