PSOJ indicates support for new gas tax
The Private Sector Organisation of Jamaica (PSOJ) supports the newly introduced gas tax, says president William Mahfood.
He says the PSOJ recognises the need for funds to facilitate the oil hedge and add some amount of stability to a very important input in production.
The minister of finance announced a $7/litre special consumption tax in his budget presentation last month, and subsequently noted that about $5 of the collections would be paid into a special fund to be administered by the Development Bank of Jamaica in collaboration with the Finance Ministry. The fund would facilitate a new oil hedging arrangement that Jamaica is currently attempting to structure for the first time.
The PSOJ head feels that the new tax is part of a programme of necessary pain.
"We do understand that this is difficult to swallow, but the alternative could be even more devastating, as we have seen the effects that high oil prices have had on business costs and the pockets of consumers. It is, therefore, important to make the sacrifice now when prices are low so that we can be more certain of the future prices. What the hedge will do is give us enough time to bring greater efficiency to the organisation of our energy sector," Mahfood said last Wednesday in an address to the Lions Club of Kingston.
"We must all ensure that this time the energy solutions be implemented without the delay we have seen over the past six years, with two failed attempts because of our bureaucratic process. The people of Jamaica must finally see the benefits of their sacrifice," the PSOJ president added.
It aims to raise $6.4 billion annually, a bill that is expected to fall on consumers, notwithstanding an entreaty by Finance Minister Dr Peter Phillips urging gas retailers not to treat it as a pass-through cost at the pumps.
Mahfood also urged the government to be steadfast in its implementation of the present International Monetary Fund programme; at the same time he says the 2015-16 fiscal year must be seen as a pivotal point for the Jamaican people in terms of the level of sacrifice that is made versus the benefits to be gained.
"This year must be a turning point and we must do everything to ensure that we maximise the benefit of our sacrifices. The Jamaican people, and businesses, have been asked to sacrifice for too long," he said.
Turning to the issue of business facilitation, the PSOJ president urged continued action to ease the bureaucracy through legislation and the reorganisation of public sector processes, saying economic growth will continue to elude Jamaica if it fails to deal adequately with red-tape barriers.
He acknowledges that there have been improvements in business facilitation, however.
"I am the first to admit that the government has made great strides in this area, and has proved to be very facilitative of consultation, and must be commended for this. But if we are to be world class, there is more to be done. And we at the PSOJ have been dialoguing with the respective authorities in this regard," Mahfood said.