EPOC chair wants boost in tax collection
Daraine Luton, Senior Staff Reporter
WITH TAX collection running 4.2 per cent behind target, Richard Byles, the co-chair of the Economic Programme Oversight Committee (EPOC) wants the relevant agencies to redouble their efforts to boost revenue flows.
"The Government needs to look even harder at the business of tax revenue collection," Byles said at a press conference held at his Sagicor offices in New Kingston on Thursday.
At the end of September, Jamaica collected $169 billion in taxes, way short of the $176.3 billion that was targeted. However, the country, despite the shortfall, attained the benchmark of $166 billion which was agreed with the International Monetary Fund (IMF) under the four-year Extended Fund Facility (EFF).
Corporate tax was the major under performer in the revenue column, falling short by $4.7 billion. Local General Consumption Tax underperformed by $3 billion, GCT on imports was behind by $1.5 billion and Special Consumption Tax fell short by $1.2 billion.
"I would like to see the government redouble its effort in looking for people who are not paying taxes and make sure that they pay their fair share just like we do," Byles said.
Jamaica, according to Byles, surpassed all the quantative performance criteria in the IMF-supported programme, and is likely to get a positive appraisal with the staff of the multilateral currently here to conduct a quarterly review.
"To achieve a sixth consecutive, successful quarterly review would be a very positive development for the country," Byles pointed out.
Among the targets for the last quarter was a cumulative primary surplus of $37.8 billion, which came out $5.8 billion above target, and a Net International Reserve of US$2.2 billion, which is US$968.3 million above the target.
Meanwhile, Byles, in responding to a suggestion from fellow EPOC member Ralston Hyman that Jamaica seeks a lowering of the 7.5 per cent primary surplus to save the programme from crashing, said the target is necessary in order for Jamaica to pay down its debt.
Jamaica has the third highest debt to GDP ratio in the world.
At the time the IMF agreement was inked last April, Jamaica's debt was 145 per cent of GDP and has since decreased to 139 per cent of GDP. Legislation governing fiscal rules have been passed in parliament which requires the debt-to-GDP ratio to be lowered to 60 per cent or less by 2026.
"Whether we run 7.5 per cent or 6.5 per cent, we have to pay it down," Byles said.
"We have an obligation and we must meet it, even if it is at the cost of not putting as much stimulus or spending as much in the economy as we would like to, or plan to," he added.