UPDATED: No new taxes for 2018/19 fiscal year, says Shaw
Non-tax initiatives and getting everybody to pay their fair share will be a critical strategy in government’s upcoming budget, according to Finance Minister Audley Shaw.
In declaring that there will be no new tax package to accompany the 2018/2019 budget the Finance Minister is again warning that he will be closing the loopholes at Jamaica’s ports.
“I’ve now instructed Customs to put in place the necessary procedures for the acquisition of modern x-ray units and we’re going to x-ray every container 100 per cent. Barrels, containers, everything coming in will be x-rayed 100 per cent because all I want is a fair system where everybody pays their duties,” Shaw told the monthly investors briefing of Mayberry Investments.
He says if everybody pays, government can actually reduce the customs duty rate, noting that as at December 2017 revenue collection was running $13 billion ahead of projections. The Finance Minister says he will not be introducing any new taxes with the 2018/19 budget. He said he is comfortable with the present rate of collections and the budget can be financed without a new tax package.
“With this trajectory it is not in government’s plan to introduce a tax package in the new budget that is coming,” Shaw said as he reviewed Jamaica’s economic performance for 2017 and projecting for 2018.
He says that with the present level of buoyancy of revenue collections government will use non-tax initiatives to bring in additional revenue. He says this is one way of ensuring an atmosphere of fairness.
“We have to do things to make sure that everybody who is importing they pay their fair share at the wharves,” Shaw said.
Turning to the public sector wage impasse, he says he wants to put the matter to rest in short order. He says the present difficulty in arriving at a settlement is proving to be a distraction.
“Over the next few weeks we want to close this episode of negotiations with the public sector because life has to go on, work has to be done, people need to be more productive. We can’t spend too much time haggling over wages,” Shaw said.
In a bid to dampen expectations Shaw is making the case that government workers have benefited from his government’s so-called $1.5 million tax initiative. He says it cannot be ignored that the government made a bold decision to lift the income tax threshold from $594,000 to $1.5 million. He argued that government workers benefited substantially from it.
“I can tell you that of the 79,000 people in the public sector, 67,000 of them directly benefited from the package. That effectively represents an increase,” Shaw argued, while noting that many government workers also benefit from a three per cent annual increase. He says any public sector wage negotiation must take all those points into consideration.
“Everything must be put into the discussion. Fair is fair regardless of which government is in power,” Shaw declared.
The Finance Minister also used the opportunity to appeal to the banking sector to bring down lending rates in line with signals from the central bank. Shaw noted that the Bank of Jamaica was sending a message in reducing their policy rate by 25 basis points to three per cent per annum.