Jamaica, Feb 13, CMC – Members of the opposition Jamaica Labour Party (JLP) walked out of Parliament during the debate on a J$15.9-billion (One Jamaica dollar = US$0.01 cents) tax package presented by government, less than 24 hours after it asked nationals to support stringent measures in order for the island to seal a multi-million dollar Stand By Agreement with the International Monetary Fund (IMF).
Finance Minister Dr. Peter Phillips in a surprise announcement said the revenue measures would include an increase in the education tax, taxes paid at ports of entry, General Consumption Tax (GCT) on telephone calls and phone cards, customs administration fees on all imports excluding charities and the bauxite sector, local stamp duty and transfer tax rates, property tax and a surtax to the taxable income of large unregulated companies.
He also introduced new taxes on the gaming sector with popular games such as Lotto, Super Lotto and Cash Pot. Some of the increases will take effect as early as March 1. Parliament later approved the tax measures.
Phillips said the government would also be dipping in to the coffers of the National Housing Trust (NHT), withdrawing an estimated J$11 million throughout the life of the IMF agreement.
“The mandate of the NHT will not change and the distribution will not impair the viability of the trust and will not reduce its capacity to build houses for the Jamaican people who need help. The NHT remains committed to its core objectives and will ensure that its housing and community development programmes are maintained,” Phillips said.
But the slew of tax measures did not sit well with the opposition legislators, with former finance minister Audley Shaw critising the government over the manner in which they measure had been announced.
“I find it more than a little deceptive Mr. Speaker that they (government) had such a show last night and the Prime Minister and Finance Minister failed to tell the people that as part of the sacrifice of which they spoke so eloquently that there would be a massive and iniquitous tax package”.
Former prime minister Andrew Holness later told reporters that while his party acknowledged the magnitude of the economic problems facing the country and has been cooperating with the government, it could not accept the new tax package.
Holness said that the JLP would be hosting a series of consultations to discuss and analyse the tax package, warning that the tax measures will stifle growth and have a negative effect on the economy.
“This package will have a negative effect on business confidence which will indeed have an effect on employment and that is our main concern, the package will ultimately make it far more difficult for the poor in this country.
“It will take those who are on the margin further into distress as there is nothing here that protects the vulnerable in our society,” he said.
Holness called on the government to create an atmosphere of confidence and promote investments, but insisted that the tax package could not do that.
On Monday night, Prime Minister Portia Simpson Miller told the nation that the centrepiece of the IMF agreement “is a commitment to significantly reduce the debt from the current level of over 140 per cent”.
Phillips also told citizens that in advance of the IMF agreement, the government will undertake various measures including steps to reduce and virtually eliminate discretionary tax waivers.
“We will also need to have a contract in place with public sector workers which will enable the achievement of a wage to GDP ratio of nine per cent by 2015/2016. We are in active discussion with the representatives of public sector workers to achieve this objective.”
