BY BALFORD HENRY Senior staff reporter balfordh@jamaicaobserver.com Friday, March 13, 2015
JAMAICANS will have to pay more taxes to drive, smoke and use electricity on April 1 when a $10.3-billion tax package introduced yesterday by Minister of Finance and Planning Dr Peter Phillips takes effect.
The tax measures came as no surprise to some observers, despite constant assurances from Dr Phillips, since the tabling of the budget on February 19, that compliance measures would fill most of the gap.
They will also affect domestic production as well as importers, including those trading with Jamaica’s Caribbean Community (Caricom) partners who are required to pay an environmental tax; those paying trade and business licence fees; and is expected to be extended to affect life insurance companies before the fiscal year ends. Hardest hit are motorists who will have to fork out some $8.2 billion more per annum to pay for petrol and petroleum products at local service stations.
Dr Phillips admitted in the House of Representatives yesterday that the hole in his $641-billion budget for 2015/16 was really $22.7-billion.
The ministry had previously spoken to a $10.4-billion gap, which Phillips suggested could be largely filled by increased compliance, as well as some changes to the Property Tax Act, new transfer tax legislation affecting transfer pricing rules, and withholding tax on statutory payments.
However, yesterday he explained that those measures would only cover $12.3 billion of the $22.7- billion-wide hole by the end of the year.
This left a gap of $10.4 billion, which has to be filled by new revenue measures. more
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