Fri | Sep 22, 2017

$16 billion more needed for Holness tax break, EPOC concerned

Published:Saturday | August 13, 2016 | 8:00 AM

The committee monitoring Jamaica's programme with the International Monetary Fund (IMF) is concerned about where an additional $16 billion will be found to finance the tax break implemented by the Andrew Holness administration.

The Economic Programme Oversight Committee (EPOC) stated its concern yesterday in its latest communiquÈ, advising that key economic indicators over the quarter April-June "are pointing in the right direction", essentially seeking to assure that Jamaica is on course to pass its 13th IMF test.

 

SURPASSED TARGET

 

It said Jamaica surpassed the IMF target for both the primary surplus, recording $26.8 billion against a target of $11 billion, and the Net International Reserves, which, up to June, was $2.3 trillion, ahead of the IMF target of $1.8 trillion.

While it noted that the immediate outlook is "positive", it has expressed concerns about where the money will come from to fill the gap when the planned further reduction in the personal income tax threshold takes effect next year.

For the first phase, which came into effect last month, the Government had imposed a $13 billion tax package to fill the gap.

But EPOC says an additional $16 billion will be needed come next April when the full tax break takes effect.

The group is wary about that aspect, saying there is a "challenge" in how the money will be found "without disrupting the primary surplus generation or investor and consumer confidence with punitive taxes".