Category: Letters to the editor

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Not the Rule of Law

Mr Anil Nandlall was one of the principal speakers when the National Assembly debated the end of provisions in the age-old law Title to Land (Prescription and Limitation) Act which allowed a person who has, without permission, occupied state land for more than thirty years to approach the court to grant title to that land. He followed that up with a letter in the press (‘Land amendment bill was promulgated to address a serious problem’ SN, March 16 ) which ends with the words “Guyana is a democracy where the rule of law reigns supreme,” and which conveniently invokes the name of Cheddi Jagan.

Mr Nandlall’s letter represents a view of democracy being only and all about five-yearly elections in which state resources can be used by the incumbent to be re-elected and where once in office, he is free to ignore constitutional requirements on local government elections, the appointment of an Ombudsman and the setting up of important commissions such as the public procurement commission; improperly accounting for and unlawfully using public funds; and enriching the re-elected party at the state’s expense as is increasingly happening in the twilight of the Jagdeo presidency. While wrong, that seems to be the democracy practised by Mr Nandlall’s party.

On the issue of the rule of law, I assume that Mr Nandlal is familiar with the Sixth Sir David Williams Lecture on the Rule of Law given by Lord Bingham of Cornhill. I would like to hear Mr Nandlall’s views on whether the state in Guyana observes the eight sub-rules of the rule of law spelt out and discussed by Bingham. For the benefit of readers I reproduce in the first person the third and sixth of these sub-rules and note that the sixth was actually highlighted (printed in bold) in the text of the lecture released to the public.

a) “My third sub-rule is that the laws of the land should apply equally to all, save to the extent that objective differences justify differentiation.

b) “My sixth sub-rule expresses what many would, with reason, regard as the core of the rule of law principle. It is that ministers and public officers at all levels must exercise the powers conferred on them reasonably, in good faith, for the purpose for which the powers were conferred and without exceeding the limits of such powers.”

Against this background, let us now compare the law relating to land as it applies to one set of people – many poor – and to another – the rich and the powerful. With the amendment – or rather repeal of the law referred to above – a long-held right of a person who has occupied public land without permission for 30 continuous years to apply for title under the Title to Land (Prescription and Limitation) Act is being taken away. To buttress his argument in favour of the repeal, Mr Nandlall quotes Article 32 of the constitution which imposes a duty on every citizen to protect the property of the state.

Now compare this with what has taken place in Pradoville 2 where state property with legal and environmental importance has been expropriated by President Jagdeo for himself, other members of the ruling elite and those whose support they need. Let us remember too that Mr Jagdeo and the political ruling class received the same kind of benefit of state land in Pradoville 1 under Cheddi Jagan and which came with several covenants which President Jagdeo failed to observe. By what stretch of the imagination can this be considered consistent with the ‘rule of law’? Or does ‘rule of law’ have one meaning for the political elite and another for the poor?

I wonder whether Mr Nandlall, the professional attorney-at-law, would refuse to act for a client seeking representation under the doctrine of legitimate expectation who has openly and for decades occupied, often with the knowledge of the leadership of the party he serves, public property, investing millions of dollars on that property.

I wonder, too, whether Mr Nandlall the politician will now tell his party that they have to support the eviction of their supporters on the East Coast Demerara whom they courted prior to the 1997 and 2001 elections with promises of ‘certificates of comfort’ and the assurance that their situation would be ‘regularized.’ And as a politician, whether he has exercised his duty to defend state property when the state’s freehold land is given to a member of the party in exchange for that person’s failure to develop leasehold land in Berbice.

Finally, I wonder whether Mr Nandlall believes that similar to the citizen in Article 32, the state has a duty to protect private property and whether he cares that persons can lose their title to someone who has unlawfully squatted on their property for twelve years – or in some cases simply stating that they have done so, as Mr Nandlall might know.

Let me make my own position clear. I am no supporter of title by prescription – whether of private or public property. But I believe that anyone who preaches or defends one standard for the poor and the powerless and another for the rich and the powerful is engaging in hypocrisy and double standards.

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The President hides under the apron of the constitution’s immunity clause

The commemoration ceremony for the late President, Dr Cheddi Jagan, at the cremation site at Babu John in Berbice has a strange and profound effect on President Jagdeo. It is as if some weird spirit causes his newly minted doctorate in literature to desert him in favour of palpable fabrication; his natural immaturity to descend into inexplicable recklessness and the stature of his presidency into miasmic freefall.

A couple of years ago the spirit caused him to tell his dumbfounded Babu John audience that if the PNCR was returned to power, the same people who were stealing guns would be given them. This year it is about blood and its target is that party’s presidential candidate, retired Brigadier David Granger against whom the accusations were so beyond the pale that even Jagdeo’s preference as presidential successor Mr Donald Ramotar sought to rephrase the accusation describing it euphemistically as “a bit harsh.”

Once again, the President abuses the country’s constitution to make defamatory statements about others while hiding under the apron of immunity article in the constitution. He knows – or rather thinks – that he has such absolute and unqualified immunity under the constitution that he cannot be prosecuted for anything. I doubt whether the framers of the constitution would have intended the constitution to be interpreted in such literal and absurd sense. Yet, his confidence – or recklessness – seems to lead him to believe that he can, with impunity, accuse others of being incompetent, habitués of rum shops, man kisser, etc.

When Mr Freddie Kissoon, whom Mr Jagdeo regularly abuses and defames, uses a term which the head of state regards as offensive to describe his presidency, Mr Jagdeo runs to the court for financial compensation for loss of reputation. In the process he also sought and obtained a silencing order (injunction) against Mr Kissoon, an order that has been challenged but not heard by the court. One hopes that when the court calls, Mr Jagdeo will be courageous enough to take the stand and answer questions about his presidency and his conduct over the past several years.

Meanwhile, I believe that in Mr Granger, Mr Jagdeo has more than met his match. Now that Mr Granger has stood up to him, we wait to see what he will do.

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Mr Khan’s letter ignores Section 13 of the Income Tax Act exempting only the President’s official emoluments from income tax

Of all the serious questions raised about President Jagdeo’s “acquisition” of acres of land at Pradoville 2, Attorney-at-law Mr Jerome Khan (‘President Jagdeo is not liable to pay capital gains tax after selling his house in Pradoville 1’ Stabroek News, February 15) has chosen to join issue on whether or not the President is liable to pay income tax under any circumstances.

Mr Khan’s entry in the minefield of revenue law with some constitutional implications is welcome and his reminder to readers about section 66 of the Tax Act Cap 80:01 is useful. However, his bold attempt to defend Mr Jagdeo in the absence of any attack and his description of excessive and possibly unlawful benefits as “protection of the law” may be excused as convenient and self-serving, even opportunistic to the point where Mr Khan ignores the basic distinction between what lawyers refer to as a sword and a shield. The constitution’s principal shield for the President is provided under the immunities article (Article 182) and with respect to income, only that it cannot be reduced to the holder’s disadvantage (Article 222 (3)).

Mr Khan’s reliance solely on section 66 of the Tax Act and his certainty about how the courts of Guyana and the Caribbean Court of Justice would rule in a matter that at best involves the thorny issue of a conflict of laws presumes too much and would hardly come from an experienced attorney-at-law. His letter completely ignores Section 13 of the Income Tax Act which exempts from income tax only “the official emoluments [emphasis mine] received by the President both when in and when absent from Guyana.”

In his forays into revenue law, Mr Khan should know that the Tax Act in its many incarnations preceded the Income Tax Act, which was first introduced in this country in 1929. Why would a court ignore the argument that the provision was in respect of known taxes at the time, particularly since under each subsequent Tax Act – Income, Capital Gains and Property – the law specifically addressed presidential exemption. Mr Khan may also note that the long title of the Tax Act is ‘An Act to consolidate the enactments relating to the imposition of taxes for the public use in Guyana.’ He would know too that there have been twenty-one amendments to Section 13 of the Income Tax Act and not a single one sought to exempt from income tax, income other than the official emoluments of the office holder.

Is Mr Khan suggesting that the parliamentary draftsmen, the attorneys general, the ministers of finance, the National Assembly and the president who assents to all acts including amending acts, did not know about the qualification in Section 13? And is Mr Khan aware that the President pays VAT on his purchases of standard rated items in the absence of a specific exemption in the Value-Added Tax Act?

Tax exemption for the head of state has a particular history and context. It derives from our colonial days when the governor’s ‘official emoluments’ paid by the British government had to be specifically exempted for two reasons. The first was that since the office or employment was exercised in British Guiana the income would be taxable here, regardless of where paid. Second, since the emoluments accrued to a person who was considered resident and domiciled in the UK, under their laws it was taxable there. In other words, the income was taxed but not in Guyana.

Ethically minded individuals assuming high political office usually place their personal assets in what is referred to as a blind trust, and studiously abstain from business deals while in office. Lawmakers make certain assumptions about the character of the holders of high office and would hardly contemplate a president being willing to stretch the laws.

But let us for a moment assume that Mr Khan is right: to exploit a loophole in the tax laws for one’s benefit is to engage in tax avoidance – something that Mr Khan as an attorney seems to be advising gratuitously but which Mr Jagdeo as President should resist. And as for Mr Khan’s pronouncements about motive and intent in the Pradoville 1 transaction, Mr Khan may wish to refer to what are called in tax laws the ‘badges of trade’; to the inferences from which motives can be drawn; and to the whole body of relevant case law which I think would be outside the scope of a letter to the editor.

I hope Mr Khan appreciates that this is not some technical issue about conflicts of laws but one of a political culture where a person operates outside and above of the law. It is about the rule of law and the equality of persons before the law. I would borrow his own words and state that I have no doubt that as taxpayer, former politician and now practising attorney-at-law, Mr Khan would agree with me on these and on the improprieties surrounding Mr Jagdeo’s property transactions. In fact the judges of the CCJ would find interesting a ‘lawless’ and unique set of laws while Mr Khan may find his confidence that that court would give him unqualified support completely misplaced.

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President Jagdeo’s land dealings not above board

President Jagdeo has finally confirmed that he has acquired land in Pradoville 2. He described the price as $5 million per acre without stating how many acres he bought. The word is that it was 2.5 acres of land, which if true is arguably the largest single plot of land by any individual in any residential area in Guyana.

Mr Jagdeo had been among the favoured comrades and strategic individuals to receive an allocation of land in Pradoville 1. He did not build until several years later, rented the house no doubt for a decent rent, and later sold it for a substantial gain. Soon after, in negotiations in which he was influential as both buyer and seller, he acquired land in Pradoville 2 at a concessionary price.

The President enjoys the following exemptions from taxes under the law:

1. on his official emoluments under the Income Tax Act;
2. from all customs duties under the Customs Act;
3. from all obligations under the Property Tax Act;
4. from all obligations under the Capital Gains Tax Act.

Under the Former Presidents (Benefits and other Facilities) Act 2009 in which he was not in an insignificant conflict, Mr Jagdeo will enjoy those exemptions plus a substantial pension and other benefits until death, or until the earlier repeal of the act.

Let us look first at tax issues facing Mr Jagdeo. Since rental is not official emoluments, the net rental income from the Pradoville 1 house is taxable. But Mr Jagdeo’s tax exposure does not end there. He never lived in that house, used it as a commercial venture and then made a substantial profit on its sale. After further consideration and research, I have revised my earlier suggestion (Business Page October 31, 2010) that the gain would be subject to Capital Gains Tax except for the exemption stated at 4 above. It is now my considered view that on a proper interpretation and application of the tax laws, the gain is taxable as income under the Income Tax Act despite the fact that it arose from what would be described as an isolated transaction.

Now to Mr Jagdeo’s land dealings. The standard clauses in transports for the purchase of land in government schemes include:

a) The purchaser must build within twelve months of the passing of transport. Any person failing to do so is bound to re-convey the property to the Central Housing and Planning Authority, subject to be reimbursed with a reasonable sum for any development works undertaken during such period.

b) The purchaser cannot sell, lease, transfer or otherwise dispose of the said property within ten years from the date of transport, without the written consent of the Minister responsible for Housing. If the person wants to do so, the Central Housing and Planning Authority must be given the first option to buy.

c) Anyone who owns real property is not entitled to purchase a lot. If it is found out that the person had owned real property within the past three years he is liable to pay to the Government of Guyana or Central Housing and Planning Authority the current market value of the lot or at its option, the Government of Guyana will be entitled to repossess the said lot upon the repayment of the purchase money less expenses incurred for repossession.

That Mr Jagdeo did not build within twelve months; that he earned rentals; and that he made a gain of approximately $100 million on the sale of the Pradoville property are hardly matters of dispute. He is therefore in breach of the condition under the Pradoville 1 transport and has tax obligations in connection with the property he owned and sold there.

Mr Jagdeo’s attorney may want to make the slick argument that Pradoville 2 is not subject to the rules that apply to government lands. But no one can dispute the arithmetic that 2.5 acres of land in the Eccles housing area (Block A) and comparable land at Diamond would fetch $10 million per acre. It is clear then that $12.5 million for 2.5 acres of ocean front land in the far more exclusive Pradoville 2 cannot be justified and Mr Jagdeo of all people must know this.

When around 1970 then Minister of Works Hydraulics and Supply Hamilton Green acquired government-owned metal sheets to paal off his private property, the PPP, the Catholic Church, the TUC, professionals and all decent-minded Guyanese were outraged. At the instance of Eusi Kwayana, the Ombudsman investigated the matter and exonerated Green. Contrast that with Mr Jagdeo’s shocking and secretive acquisition, contempt for the dignity of the highest office in the land, disdain for the opinion of the people, making a joke of the Norwegians and the United Nations Champion of the Earth award, and the threat and fear of rising sea levels that Jagdeo’s land deals epitomise. It is doubtful that even Burnham knew the possibilities for misuse that his 1980 constitution offered. Hoyte and the two Jagans obviously did not contemplate it. It has taken thirty years and a Bharrat Jagdeo for those possibilities to be exploited to this degree. And we have not seen the end. As a result of his Former Presidents Benefits Act, taxpayers will have to meet for the rest of his life the cost of the maids, gardeners, water, electricity and telephones for a property that under any standards of decency would be considered with more than mere suspicion.

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There is a gap of between 15,000 and 19,000 who are paid the Old Age Pension but are not entitled under the law

Minister of Human Services Ms Priya Manickchand behaved with apoplectic rage in response to a conclusion in a report by her parliamentary colleague Mrs Sheila Holder that the number of persons to whom the Old Age Pension (OAP) is paid is inflated by 17,640 (phantom persons, according to Mrs Holder) with a loss to the state of over $1.3 billion.

Ms Manickchand reacted badly too to a cartoon in the Stabroek News of January 27 depicting her unflatteringly, prompting a letter by her which appeared with another by Mr Ivelaw Henry, her Chief Statistical Officer, both on the same day in the Stabroek News (Saturday, Jan 29) challenging Mrs Holder’s numbers. They both cited in support of the numbers being challenged projections done in November 2006 by a Mr Sonkarley T Beaie, who is described as a UN demographics expert and the holder of an MPhil, perhaps with a view to impress us.

To understand the conflicting positions, it is convenient to address three separate but related issues – statistics, the legal framework for the payment of OAP, and the arrangements in place for the payment of Old Age Pensions.

The most recent census done in 2002 shows the following data in relation to persons 65 years and over:

Between censuses, the country’s mid-year population is tracked by the Bureau of Statistics from data on births, deaths and migration, and is reported on in an appendix to the annual Budget Speech by the Minister of Finance. This is what the Bureau of Statistics reports for the years following the 2002 census: 2003 – 752,500; 2004 – 755,100; 2005 – 757,600; 2006 – 760,200; 2007 – 763,200; 2008 – 766,200, 2009 – 769,600, 2010 – 777,900.

One must always be cautious about population data and even more careful about making assumptions from them. I therefore wonder why instead of taking the actual population figure Mr Henry and his Minister chose to rely on Mr Beaie’s increasingly incorrect projections which for total population in 2010 were “wrong” by 10,000. It is fair to say that any major change in the characteristics of a population – other than through migration, a plague or a baby boom – takes place very slowly. From 1980 to 1991 the shift in the over 65 age group was a 0.16 percentage point and from 1991 to 2002 it was a 0.12 percentage point as shown in the table above. Even if we generously assume that the percentage of that group as a percentage of the current population has climbed to 4.5%, the maximum number of persons eligible for OAP would be approximately 35,000, or 7,000 less than the “around 42,000” the Minister of Finance referred to on more than one occasion in his Budget Speech.

That is not the end of the story, since not every person 65 and over is entitled to OAP. The Old Age Pensions Act sets as the conditions for eligibility for OAP that the person must have: (a) attained the age of sixty-five years; (b) been a citizen for ten years; (c) been ordinarily resident in Guyana during the last twenty years; and (d) passed a means test based on income and assets. Therefore any returnee to Guyana before 1991 is not entitled to a pension because of condition (c) and many if not most of the senior citizens living in Courida Park, Queenstown, Pradoville, Oleander Gardens, Republic Park, former senior public servants, professionals including doctors and lawyers, etc, are not entitled under condition (d).

We all have and know of countless others of our friends and relatives and their parents who do not claim Old Age Pensions. These would include persons 65 and over in the population not entitled to on account of their income and/or assets, plus those who are entitled to but do not claim because they do not know they qualify, plus those not entitled because they returned to Guyana less than twenty years ago. Those probably number between 8,000 and 12,000. To get to the number who meet all the tests, we need to deduct these from the maximum, theoretical 35,000, leaving between 23,000 and 27,000 persons who are entitled. This means that there is a gap of between 15,000 and 19,000 who are paid, but who are not entitled to the pension under the law.

At the current rate of $7,500, between $1.4 billion and $1.7 billion is being paid out unlawfully each year.

A recent Value-For-Money audit done by the Audit Office identifies a host of accounting and audit issues that could have given rise to the wide gap.

While the Audit Office must be commended for undertaking the exercise, it is regrettable that it did not attempt to put in dollar terms the range of values involved in its findings, and that it did not look at the related public assistance programme that is subject to even fewer rules and is more politicised and corrupted.

Let us put the calculation into perspective. If Old Age Pensions were paid only to persons legally entitled, then each pensioner could easily receive another $4,000 to $6,000 per month out of the money allocated in the 2011 Budget.

Ms Manickchand should now be willing to make her list publicly available for scrutiny.