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Drivers to dig deep - Motorists get hit twice with revenue measures

Published:Friday | March 10, 2017 | 12:15 AMEdmond Campbell
Audley Shaw (right), minister of finance and public service, has the full attention of Opposition Leader Portia Simpson Miller and Dr Peter Phillips, opposition spokesman on finance, just before Shaw opened the 2017-2018 Budget Debate at Gordon House in Kingston yesterday.

Motorists will bear a significant weight of the nearly $30 billion in revenue measures announced yesterday by Finance and the Public Service Minister Audley Shaw in Parliament.

In opening the 2017-2018 Budget Debate, Shaw announced a 20 per cent hike across the board on motor-vehicle licences while increasing Special Consumption Tax (SCT) on petrol, which takes effect on March 15.

Motorists who purchase unleaded gasolene, both 90 and 87, have been slapped with a $5.67 hike per litre, while persons purchasing automotive diesel will have to spend an additional $6.70 per litre.

In terms of the proposed motor vehicle and driver's licence-related fee increase, motor cars (taxis) have moved from $7,700 to $9,240.

Motor cars with cc rating not exceeding 1199 will also pay $9,240, up from $7,700.

Persons who own motor cars with cc rating exceeding 1199, but not exceeding 2999cc, will now pay $12,600 to license their vehicles, up from $10,500. This is an increase of $2,100.

And persons seeking to get a driver's licence (general) will have to pay $7,200, an increase of $1,200.

While outlining other measures, Shaw said that the promised $1.5 million threshold for taxpayers would take effect on April 1, even as he declared that the Government would again dip into the coffers of the National Housing Trust (NHT) to extract $11.4 billion to fund the Budget.


'Not a raid'


When quizzed on whether the administration has 'raided' the NHT, Shaw said: "We don't see it as a raid. It's part of a package and a total plan that is yielding greater benefits to hundreds and thousands of people. That's not a raid!"

However, in 2013, Shaw castigated the previous administration for seeking budgetary support from the trust. "I am surprised at the IMF that they are supporting this kind of scandalous raid on a trust fund," he said in 2013.

At the same time, the Government has widened the General Consumption Tax (GCT) net to pull in Jamaicans who consume more than 150 kilowatt hours of electricity per month.

General Consumption Tax has also been imposed on group health insurance, effective April 3 this year.

Alcoholic beverages did not escape an increase in SCT, with the amount moving from the rate of $1,120 to $1,230 per litre of pure alcohol.


$3 more for cigarettes


Cigarette smokers will also have to dig deeper into their pockets to purchase cigarettes, with the sum jumping from $14 to $17 per stick.

Shaw said that with this measure, the Government seeks to balance the imperatives of revenue while at the same time seeking to promote healthier lifestyles.

The finance minister also announced a reduction in the rate of property taxes, effective April 1, 2017. He said that the reduced rate would result in more than 272,000 property owners benefiting from lower rates or experiencing no change in the amount charged last year.

He said that a flat fee of $1,000 would remain in effect for properties valued at $400,000. An additional $3.9 billion will come from the revised property tax system, which will go towards local government.

The minister indicated that the Government was looking at linking the payment of property taxes to the issuance of a Tax Compliance Certificate. Currently, the compliance rate is a mere 51 per cent, with a $13.8 billion in arrears on property tax.