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The Nation Welcomes …No New Taxes
Published: Friday | April 19, 2013 6 Comments
Dr Peter Phillips
Gary Spaulding, Senior Gleaner Writer
Jamaicans breathed a collective sigh of relief, government members cheered, and the parliamentary Opposition appeared muted as Dr Peter Phillips, the finance minister, confirmed yesterday that he had fashioned a Budget for the 2013-2014 financial year without burdening Jamaicans with a slew of new taxes.
With the nation's business leaders and the parliamentary Opposition signalling that they were not expecting a significant tax package, Phillips went one better, declaring repeatedly with pointed emphasis that "there are no new taxes" as he opened the Budget Debate in the House of Representatives.
Phillips announced that the two tax packages unleashed on the people of Jamaica in the last fiscal year were sufficient to finance the reduced Budget of $520.88 billion.
The pair of tax packages went a far way in eking out what initially appeared to have been an elusive deal with the International Monetary Fund (IMF).
Phillips' government colleagues visibly preened in anticipation of the good news that taxpayers, many affected by a wage freeze, would not have to shoulder yet another round of the dreaded taxes - the third in a year.
He told the House that the existing tax measures are expected to yield $360.5 billion of $407.2 billion the Government expects to rake in in total revenues.
However, the Portia Simpson Miller administration will borrow an estimated $103 billion to support the Budget. This compares to $147 billion in the 2012-2013 financial year.
Planned borrowing
Phillips disclosed that the Government plans to borrow $13 billion from domestic sources and to repay $76.4 billion to the same market. This is intended to release just under $62.6 billion in resources into the domestic market for lending to the private sector.
He revealed that non-tax revenues and bauxite levies totalling $36.1 billion were expected to flow into the Government's coffers, to be enhanced by capital revenue of $1.1 billion. This is to be capped off by projected grant inflows of $9.4 billion.
Said Phillips: "The tax revenue resources of just over $360.5 billion exceeded the outturn for the 2012-2013 financial year and included an entire year's estimate of the two tax packages announced in the last financial year."
He added that the revenue intake is almost evenly distributed across the three main tax types: income and profits, production and consumption, and international trade.
Focus on collection
As his predecessors on both sides of the political divide had done in previous Budget Debates, Phillips stressed that focus would be directed to collecting the taxes already imposed. "Our compliance rate is well below acceptable standards and must be improved if we are to get out of this debt," he emphasised.
The finance minister vowed that streamlining measures previously announced to remove inefficiencies and distortions would be the order of the day in the current financial year. "In this debate, I am advising the House of two proposals which have been approved by Cabinet to address the issue. They are adjustments to the GCT Act and the rate structure of the Customs Administration Fee (CAF)," he said.
The adjustment to the GCT Act to zero rate is on the supply of electricity to domestic residential customers. "This will allow the (Jamaica Public Service (JPS) to claim input tax credit for this facility," Phillips said.
The finance minister said this decision was made to allay concerns that the light and power company had complained that their cash flows would be negatively affected by this initiative.
gary.spaulding@gleanerjm.com
Published: Friday | April 19, 2013 6 Comments
Dr Peter Phillips
Gary Spaulding, Senior Gleaner Writer
Jamaicans breathed a collective sigh of relief, government members cheered, and the parliamentary Opposition appeared muted as Dr Peter Phillips, the finance minister, confirmed yesterday that he had fashioned a Budget for the 2013-2014 financial year without burdening Jamaicans with a slew of new taxes.
With the nation's business leaders and the parliamentary Opposition signalling that they were not expecting a significant tax package, Phillips went one better, declaring repeatedly with pointed emphasis that "there are no new taxes" as he opened the Budget Debate in the House of Representatives.
Phillips announced that the two tax packages unleashed on the people of Jamaica in the last fiscal year were sufficient to finance the reduced Budget of $520.88 billion.
The pair of tax packages went a far way in eking out what initially appeared to have been an elusive deal with the International Monetary Fund (IMF).
Phillips' government colleagues visibly preened in anticipation of the good news that taxpayers, many affected by a wage freeze, would not have to shoulder yet another round of the dreaded taxes - the third in a year.
He told the House that the existing tax measures are expected to yield $360.5 billion of $407.2 billion the Government expects to rake in in total revenues.
However, the Portia Simpson Miller administration will borrow an estimated $103 billion to support the Budget. This compares to $147 billion in the 2012-2013 financial year.
Planned borrowing
Phillips disclosed that the Government plans to borrow $13 billion from domestic sources and to repay $76.4 billion to the same market. This is intended to release just under $62.6 billion in resources into the domestic market for lending to the private sector.
He revealed that non-tax revenues and bauxite levies totalling $36.1 billion were expected to flow into the Government's coffers, to be enhanced by capital revenue of $1.1 billion. This is to be capped off by projected grant inflows of $9.4 billion.
Said Phillips: "The tax revenue resources of just over $360.5 billion exceeded the outturn for the 2012-2013 financial year and included an entire year's estimate of the two tax packages announced in the last financial year."
He added that the revenue intake is almost evenly distributed across the three main tax types: income and profits, production and consumption, and international trade.
Focus on collection
As his predecessors on both sides of the political divide had done in previous Budget Debates, Phillips stressed that focus would be directed to collecting the taxes already imposed. "Our compliance rate is well below acceptable standards and must be improved if we are to get out of this debt," he emphasised.
The finance minister vowed that streamlining measures previously announced to remove inefficiencies and distortions would be the order of the day in the current financial year. "In this debate, I am advising the House of two proposals which have been approved by Cabinet to address the issue. They are adjustments to the GCT Act and the rate structure of the Customs Administration Fee (CAF)," he said.
The adjustment to the GCT Act to zero rate is on the supply of electricity to domestic residential customers. "This will allow the (Jamaica Public Service (JPS) to claim input tax credit for this facility," Phillips said.
The finance minister said this decision was made to allay concerns that the light and power company had complained that their cash flows would be negatively affected by this initiative.
gary.spaulding@gleanerjm.com
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