How Electronic Transactions in Jamaica can eliminate Hidden Economy via Universal Consumption Taxation

“Contrary to what many people think, there are costs associated with cash. From direct costs, like production and transportation of bills and coins, to indirect costs such as corruption, social insecurity, financial exclusion, timely state aid payments and tax collection complications. These are all absorbed by the Jamaicans”

MasterCard senior vice-president and general manager for the Caribbean, Gabriel Zuliani commenting on the Dr Friedrich Schneider entitled Evaluating the Social Cost of Cash

Jamaica needs to grow its usage of electronic payments.

So says Dr Friedrich Schneider in a study entitled Evaluating the Social Cost of Cash on the type of transactions in several countries including Jamaica as reported in the article “Cash Is Costly, Says Study By Card Company”, published Wednesday June 1, 2016 by Steven Jackson, The Jamaica Gleaner.

The Mastercard commissioned study was carried out by Dr Friedrich Schneider, Professor of Economics at the Johannes Kepler University of Linz in Austria. The study was conducted in several countries around the world including:

1.      Jamaica

2.      Trinidad and Tobago

3.      Dominican Republic

The study came to the following conclusions:

1.      9 in 10 transactions in Jamaica is done via cash or cheques

2.      1 in 10 transactions in Jamaica is done via electronic transactions

Electronic Transactions mainly refer to:

1.      Debit Cards

2.      Credit Cards

3.      Wire Transfers

So how does Jamaica's use of cash affect economic growth?

Electronic Cash transactions and Jamaica - Tapping into the informal economy of the Unbanked

According to the study, if these countries reduced cash transactions by 30% per cent over four (4) years:

1.      0.7% per annum additional growth in Jamaica

2.      1.1% per annum additional growth in Dominican Republic

3.      3.6% per annum additional growth in Trinidad and Tobago

It was the connection to growth in these countries that caught my eye. According to the Evaluating the Social Cost of Cash, the cost of cash suggest that:

1.      30% of the overall economy is informal i.e. untaxed cash transactions

2.      70% of the overall economy is formal i.e. electronic transactions that pass through a bank

These users of cash, many of whom are unbanked, are potential future customers of Jamaicans banks, to quote Gabriel Zuliani: “The use of cash in Jamaica is super big. So opportunities include credit, debit, prepaid and remittances”.

Clearly with 90% of transaction still done using cash, this represents a huge growth potential for banks and other financial institutions for the introduction of Mobile money as argued in my Geezam blog article entitled “How Quisk Mobile Wallet impressed at inaugural NCB Digital Tech Symposium”, especially as these people may represent the unbanked in Jamaica.

According to research done by University of the West Indies as mentioned in the article “BOJ Developing Agent Banking System To Reach The Unbanked”, published Friday October 11, 2013 by Avia Collinder, Business Reporter, The Jamaica Gleaner. 

The UWI Research into the Unbanked was conducted by Associate professor, Department of Economics at Texas Christian University Dr Dawn Elliott and a team of statisticians from UWI as mentioned in the article “Jamaica Counting On its Unbanked”, published Friday, September 30, 2011, the Jamaica Observer. 

The figures are as follows:

1.      34% of persons above 18 years old in Jamaica do not own Bank accounts i.e. Unbanked 

2.      66% of persons above 18 years old in Jamaica own Bank accounts i.e. Banked

3.      12% of Banked have transactional accounts that they use to conduct business i.e. Highly Banked

4.      80% of persons above 18 years old in Jamaica have limited access to a low-cost, efficient and easily accessible payment channels

This study is so important, it was cited twice by State Minister in the Ministry of Science, Technology, Energy and Mining Julian Robinson in a Tuesday May 28^th, 2013 Sectoral Debate and later in a Wednesday June 11^th, 2014  Sectoral Debate.

So are electronic transactions cheaper than cash transactions?

Cash vs Electronic transactions - Cashless society in Jamaica by the year 2020

Part of the problem is the perception that cash is free when compared to electronic transactions.

It's generally perceived that there is an added cost to businesses to set up POS (Point of Sale) terminals and bank accounts to handle electronic transactions. However, using cash incurs the following costs:

1.      Production of cash

2.      Distribution of cash

3.      Collection of Cash

4.      Security and counterfeit prevention

According to MasterCard senior vice-president and general manager for the Caribbean, Gabriel Zuliani, this unseen cost of using cash affect the society, which are borne by Jamaicans, quote:  “There is the perception that cash doesn't bear any cost. But there is a huge cost for the society. Often times, the consumer doesn't see that cost [of cash] and doesn't carry that cost, but the society feels it”.

The shift towards electronic transactions such as Mobile Money as described in my blog article entitled “How NCB Mobile Money by AIS and Quisk heralds Mobile phone ATM Withdrawals by December 2016”, possibly via legislation for the Government of Jamaica and banks, would benefit Jamaicans. This as by making every transaction electronic, it would not only eliminate the production, distribution and collection costs of cash but also:

1.      Reduce corruption

2.      Make it easier to trace cash transactions

3.      Make money laundering difficult

4.      Uncover hidden incomes within the society

5.      Increased compliance with the IRS and FATCA

Legislation therefore need to be enacted to eliminate cash transactions, with the Government of Jamaica leading the way by making all transactions electronic, possibly even introducing bitcoins as explained in my blog article entitled “Microsoft accepts Bitcoins for Purchases - Napster of Cryptocurrency set to explode in Jamaica in 2015 Year of the Sheep”. 

This could pave the way for a Cashless society in Jamaica by the year 2020

So how can a switch to a Cashless society benefit Jamaica?

The Jamaican Cashless Society - How Universal Consumption Taxation eliminates the Hidden Economy

Electronic transactions could potentially make Jamaica a cashless society. This could be possible by passing legislation making cash accepting or doing cash transactions illegal.

This would eliminate the informal economy and grow the formal economy, to quote Gabriel Zuliani: “A greater financial inclusion and greater use of storage of electronic values and electronic payments are key drivers of economic development and the reduction of indirect costs, such as the informal economy”.

It could potentially open the way to introducing GCT and Income Tax to every Jamaican once they receive remittances, or do transactions via their Credit and Debit Card. This as if transactions are electronic, they can make every transaction traceable; GCT and Income tax would be easier to collect, costing less n terms of paperwork, as it would only be a matter of checking the banks. 

Jamaica, Taxation and Electronic transactions – How Education, Housing, Transportation and Healthcare can be free by 2020

Electronic transactions would eliminate situations where Companies and wealthy individuals use taxation loopholes to dodge paying taxes.

It would also help Jamaica to be compliant with the IRS in terms of catching Americans dodge paying over monies to IRS (Internal Revenue Service) via FATCA (Foreign Account Tax Compliance Act) and spend it on vehicles as described in my blog article entitled “How Increase Motor Vehicle Importation related to Americans dodging FATCA”.

This increased collection of taxation can not only eliminate the need for income tax but the level of taxation generated could potentially be used to do the following:

1.      Free Education up to University level

2.      Free Housing

3.      Free Transportation

4.      Free Healthcare

This is how growth could potentially be achieved. Using electronic transactions, the GOJ could make taxation universal and harder to avoid, eliminating the hidden economy and making social amenities free in Jamaica.

Here's the link:

Evaluating the Social Cost of Cash

Why 15 Zika Virus cases means possible Clarendon cases as Zika spreads Westward

“We reported it to the health department, and the public health people came and fogged our schools and gave the students tips on protecting themselves”

Principal of the Vere Technical High School Dr Henrietta Stewart commenting on students coming down with Zika Virus-like symptoms

The Zika Virus has come to Clarendon. Already, there is panic in the streets of Lionel Town.

This as many resident of the community of the south coast of Clarendon have been reporting since to the Lionel Town Health Centre as reported in the article “ZIKV Seemingly On The Rise In Clarendon”, published Tuesday May 31, 2016 by Shanique Samuels, The Jamaica Gleaner.

To be specific, the people coming in with Zika Virus-like symptoms are from the following parts of southern Clarendon:

1.         Waterlane

2.         Lionel Town

3.         Nineteen Mile

4.         Sandy Bay

Students from the following schools are also reporting symptoms of the Zika Virus:

1.      Hayes Primary 

2.      Vere Technical High

3.      Green Park Primary

4.      Junior High School

The symptoms of the Zika Virus, take four (4) to seven (7) days after the initial infection to manifest.

They can last for up to four (4) weeks or longer and are not much different from the symptoms of the common cold:

1.      Conjunctivitis

2.      Fever

3.      Headache

4.      Joint and muscle pain

5.      Rash

6.      Swelling of the lower limbs

7.      Weakness

So, so the people of southern Clarendon have the Zika Virus?

15 Zika Virus Cases confirmed - Clarendon victims indicate the Virus is spreading westward

Medical officer of health for the parish Dr Kimberly Scarlett Campbell is awaiting the results of blood tests to prove that these persons do indeed have the Zika Virus.

However, she doesn’t have to wait long; the Ministry of Health has confirmed fifteen (15) more Zika Virus cases as reported in the article “15 Zika Cases Confirmed”, Published Wednesday June 1, 2016, The Jamaica Gleaner.

Of these fifteen (15) cases, ten (10) are in St Thomas and St. Catherine, which means the remaining five (5) may be in Clarendon.

Seven (7) parishes in Jamaica have been listed as having a high risk of a Zika Virus outbreak.

1.      Kingston

2.      St Andrew

3.      St Catherine

4.      St Thomas

5.      Clarendon

6.      Manchester

7.      Westmoreland

I've long concluded that there is a Ministry of Health cover-up game being played out reminiscent of the Chikungunya virus of 2014 as per my analysis in my blog article entitled “Why the Ministry of Health is covering up Local Transmission of Zika Virus in Jamaica”

However, Minister of Health, Dr. Christopher Tufton states that there may be more Zika virus cases than the officially confirmed fifteen (15) as per the audio clip below

There are even reports of a pregnant woman who has the Zika Virus as reported in the article “Gov't Declines To Confirm Reports Of A Pregnant Woman's Zika Diagnosis”, Published Wednesday June 1, 2016, The Jamaica Gleaner.

Good to note that Dr. Christopher Tufton and his Health Ministry are still trying to verify these various reports of Zika Virus. This is via using their recently upgraded National Virology Reference Laboratory at the UHWI (University Hospital of the West Indies) as noted in my blog article entitled “How Ministry of Health ramping up as Chikungunya, Zika, Dengue and H1N1 attack Jamaican at Champs”. 

She may become the first woman to give birth to a child that shows signs of microcephaly, which is now connected to the Zika Virus as noted in my blog article entitled “How the Zika Virus now connected to Microcephaly, acute myelitis and Guillain-Barré syndrome”.

 

If Clarendon is the latest set of victims, this means that the Zika Virus is spreading westward. It'll only be a matter of time before we hear of official cases from these far-flung parishes.

Preventing Zika Virus - Irradiated Mosquitoes and Essential oils may be the key

The Zika Virus is especially dangerous to the following vulnerable groups:

1.      Babies

2.      Children suffering from an illness

3.      Elderly persons with other health problems

Preventing the Aedes Aegypti mosquito from breeding and reducing Aedes Aegypti mosquito bites be best achieved by:

1.      Wearing long-sleeved clothing or long pants

2.      Using DEET insect repellents

3.      Sleeping under mosquito nets

4.      Removing or covering container that can hold water

Mosquito Repellent Laundry Soap and the Blue Power Castile Soap, both of which are infused with citronella oil, cannot stop the Zika Virus as reported in my blog article entitled “Why the Blue Power Mosquito Repellent Laundry Soap and Castile Soap cannot stop Zika Virus Infections”, as the effect wears off too quickly.

You stand a better chance of making your own insect repellant from essential oils as reported in my MICO Was blog article entitled “How to make DEET-free mosquito repellant from Essential Oils and iso-propyl alcohol”. 

Reducing the breeding places for the Aedes Aegypti mosquito is crucial to controlling the spread of the Zika Virus as shown in the CARPHA Yard Poster below.

Possibly too, the Ministry of Health's plan to use irradiated mosquitoes may also work as explained in my blog article entitled “How Ministry of Health andIAEA using Radioactivity to reduce Aedes Aegypti Mosquito Population”.

Homeowners can try using the distilled essence of Garden croton, Tawa-tawa and Lemon grass, which 17-y-o Jerouen Paul Lumabao from the Philippines has demonstrated to have killing power over mosquito larvae as reported in my blog article entitled “How Garden croton, Tawa-tawaand Lemon grass can be used to kill Aedes Aegypti Mosquito Larvae”.

Finally boosting your immune system by taking Vitamin C and Vitamin B Complex is the way to go.

Why Vinyl made US$422 million in revenue in 2015, beating ad-based streaming services

“The consumption of music is skyrocketing, but revenues for creators have not kept pace. In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meagre —  far less than other kinds of music services. And the problem is getting worse”

RIAA CEO Cary Sherman statement following the company’s release of the 2015 numbers

Jamaican artiste, Music is slowly dying. Cause of death; ad-based streaming services. On the plus side, now is a good time to press your album as a vinyl record.

According to the RIAA (Recording Industry Association of America), vinyl sales generated more revenue than all on-demand streaming services in 2015 as reported in the article “Vinyl Sales Eclipsed Every Ad­based Streamer In 2015”, published March 23, 2016 by Parker Hall, Digitaltrends.

The RIAA stats make this glaring obvious:

1.      17 million vinyl copies sold

2.      US$422 million in revenue from vinyl sales

3.      US$385 million in sales from ad-based streaming services e.g. YouTube, Spotify, VEVO and Soundcloud

Streaming has been on the rise as Physical Digital Music Purchases and Digital Downloading took a nosedive in 2014 as noted in my blog article entitled “RIAA says Streaming beating CD Sales  - Why HD Audio Physical Digital Music comeback progresses as Piracy is the Problem”.

However both platforms have enjoyed growth when 2015 revenue figures are compared to 2014 revenue figures year-on-year:

1.      30% increase in ad-based streaming services

2.      32% increase in vinyl sales

However, there is more to the numbers than meets the eye.

Ad-based streaming services vs Vinyl - Broken Music Industry model needs paid streaming

Vinyl is more efficient in generating revenue, bringing in a lot more revenue from fewer people than ad-based streaming services, which is basically free streaming.

In fact, paid streaming is where most streaming services such as YouTube, Spotify, VEVO and Soundcloud make the bulk of their money, averaging some 10 times more revenue than free ad-based streaming.

Ironically, the main purchasers of vinyl records, Millennials, make their purchases only to support the artiste, as they do not actually play them at home. They instead prefer to frame them in their beautifully designed album covers as one would do to a painting as noted by ICM Unlimited research in the article “Streaming Drives Vinyl Sales, Not Necessarily Vinyl Listening”, published April 14, 2016 By Parker Hall, Digitaltrends.

This distorted earning profile of the music industry is striking; an obsolete music format is generating more revenue than billions and billions of on-demand free streams, to quote RIAA CEO Cary Sherman: “Need further proof that some fundamental market distortions are at play? Last year, 17 million vinyl albums, a legacy format enjoying a bit of a resurgence, generated more revenues than billions and billions of on-demand free streams”.

This would explain in part why content publishers and advertisers have rolled out ad-blocker detecting software to combat the growing phenomenon of ad-blockers on smartphones as noted in my Geezam blog article entitled “How Ad-blocker Detecting Software protect US$22 billion Advertising Industry”. 

They're trying to protect their revenue coming from free ad-based streaming, even as the vinyl LP and EP formats makes more revenue as evidence by Taylor Swift's 1989 vinyl version making more revenue for the artiste than all of her streaming deals as pointed out in my blog article entitled “Taylor Swift and Vinyl – Why Female Hipsters diggin’ her New Groove as Vinyl Sales Rise”.

Clearly the Music Industry model is broken as Musical artiste cannot survive on ad-based streaming; paid streaming is the answer in the long run.

How Facebook Ads is using AI to build their version of Google Adwords and Adsense

Facebook, tired of the Dominance of Google Adwords, is launching their own Third-Party Ad Network.

On Friday May 27^th2016, Facebook announced plans to launch their own version of Google Adwords as noted in the article “You can run but you can't hide: Facebook Ads are coming for you”, published May 28, 2016 by Anthony Thurston, Digitaltrends.

They’ve been testing this idea since 2012 but now they're finally ready for primetime. Facebook Ads will mimic Google Adwords, which allows website owners to make money via Google embedded script plugins and Google Adsense, which accepts payments from advertisers who wish to advertise on their Google Adwords Network.

Facebook Ads – Advertising network to rival Google Adwords and Adsense

Facebook Ads will effectively create their own third-party advertising Networks, providing their own mix of cookies, buttons, and plugins to offer to advertisers as well as website and blog owners who want to make revenue from advertising.

The move will expand their reach beyond their 1.65 billion monthly active user base in a bid to tap into a lucrative US$22 billion dollar advertising market which netted them some US$5 billion in the Second Quarter of 2016.

Their decision couldn't have come at a more unusual time, as the content providers and online advertisers are at war with developers of Ad-blockers with their latest weapon of choice, Ad-blocker Detecting Software as explained in my Geezam blog article entitled “How Ad-blocker Detecting Software protect US$22 billion Advertising Industry”.

Hopefully they’ll offer a higher CPM than Google as well as fins a solution to Ad-blockers, as the Arms race between the content providers, online advertisers and developers of Ad-blockers is showing no sign of ending.

Facebook leveraging AI – Facebook will always watching you to make Ads relevant

This means avoiding Facebook Ads will be much harder, as if their Network of advertisers as well as website and blog owners is extensive enough, they can basically serve you Ads even when you're not logged into Facebook.

But what has me fascinated is the fact that Facebook will leverage their AI (Artificial Intelligence) machine learning algorithms to identify visitors to third-party websites, learn your interests and serve you advertising content as described in my blog article entitled “How Facebook AI Engineers use AutoML to teach FLOW to make Asimo”.

Just as they currently do on Facebook, but without you being logged into Facebook. Folks, it'll be like you never left Facebook.....which is both comforting and troubling, depending on the love-hate relationship you have with Facebook!

So, Facebook Ads......anyone!??