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Don't rush it! - JCTU warns Holness administration about tax policy

Published:Tuesday | March 29, 2016 | 3:00 AMJovan Johnson

One of the country's major trade union blocs is warning the Andrew Holness administration not to allow commitments to an election campaign promise to force it to implement income tax relief without addressing all concerns about the policy.

Helene Davis Whyte, vice-president of the Jamaica Confederation of Trade Unions (JCTU), said the members of her organisation have questions about the proposal to remove income tax from the salaries of persons who earn up to $1.5 million annually.

After the removal, everyone else, up to those who earn $5 million a year, would receive the existing tax-free exemption of $592,800 and pay a standard rate of 25 per cent on the rest of their income. People who earn anything above $5 million a year would be denied exemptions and, therefore, pay the standard rate on their entire income.

"We (JCTU) do not have a position on the proposal to say whether we view it as good or bad," Davis Whyte told The Gleaner.

"Our members have concerns, and the Government must ensure that it takes the time to address them. They should not rush to implement just because a timeline was given in the election (campaign)."

SOURCE OF FUNDING

The trade unionist pointed out that some of the concerns relate to the source of the funding for the income tax policy.

According to her, the proposed sources, which include using money from the tax on gas, tax arrears, and stimulus from an expected increased spending, may not be sufficient to maintain the policy.

Holness had promised an April 1 implementation deadline, but, last week, Information Minister Senator Ruel Reid said an announcement would be made on the implementation of the tax policy at the end of the two-day Cabinet retreat set for March 31 to April 1.

Analysts and some public commentators have argued that the proposed tax policy is inequitable and could be an administrative nightmare.

Ralston Hyman, financial analyst and member of the Economic Programme Oversight Committee, has argued that the Holness tax plan could derail ongoing reforms under Jamaica's programme with the International Monetary Fund.

The JCTU is made up of 11 unions which, altogether, represent about 40,000 public-sector workers.

Last week, the Jamaica Civil Service Association called for the Government to abandon its plan and instead implement an across-the-board increase of the income tax threshold to $1 million.

jovan.johnson@gleanerjm.com