$16 b. in new taxes
KINGSTON – The Government yesterday approved revenue measures, including a $16.4-billion tax package and $45 billion in contributions from the National Housing Trust (NHT) over four years, minutes after the Opposition walked out of Parliament in protest against the measures which it described as “massive” and “iniquitous”.
The revenue measures will affect GCT on telephone calls and phone cards; education tax; customs administration fees on all imports except for charities and the bauxite sector; local stamp duty and transfer tax rates; winnings in the Cashpot, Lucky 5, Dollaz, Pick 3, Pick 2, Pick 4, Lotto and Super Lotto games; property tax; fees and taxes paid at ports of entry; tax on dividends payable to residents; and add a surtax to the taxable income of large, unregulated companies.
$45.6 b. from NHT
Minister of finance and planning, Dr. Peter Phillips, who was closing the debate on the first supplementary estimates for 2012/13 when he tabled the measures, disclosed that in addition to the revenue measures, the NHT will be required to contribute $11.4 billion per year for the next four years, or $45.6 billion to the Government’s coffers towards fiscal consolidation.
Phillips claimed that despite the huge NHT contribution, the State agency’s mandate would not change and the distribution will not impair its viability.
However, Opposition Leader Andrew Holness told a press conference called after his side’s walk-out that he was concerned that the Government would be “sucking out $44 billion out of the NHT over the next four years and the effect it will have on its performance”.
Phillips explained that the depth of the economic crisis affecting Jamaica was such that the combination of measures, including revenue enhancement, wage restraint, prioritisation of expenditure as well as divestment of public assets would not be enough to achieve the target of a 7.5 per cent primary (budget) surplus this year, hence the need for the tax package.
He said that the measures proposed to close the gap would include the new tax measures, which were projected to rake in $16.3 billion this year, plus the $11.4-billion per year from the NHT.
But Opposition spokesman on finance Audley Shaw blasted the Government for the tax package which, he said, will stifle production.
After the Opposition’s walk-out, triggered by the Government’s refusal to suspend the debate until Thursday, Dr. Phillips claimed that the procedure followed by the Government in the debate was no different from that followed in the past, “except for the Opposition walk-out”.
He said that the crisis the country is facing demands urgent solutions and actions. He also said that the Government was not proposing to introduce more taxes when it tables the 2013/14 budget in April. (Observer)