Petrol dealers brace for tax double whammy
Members of the Jamaica Gasolene Retailers Association (JGRA) are bracing for a double whammy from the combined effect of recent tax increases on petrol and the hike in property tax announced in the 2017/18 budget, according to president Philip Chong.
"The impact is not there yet but we suspect it will come from both the property taxes and the increase from the petroleum taxes. I would expect franchise fees and other things to go up and if we were to pass that on then petrol (prices) will go up additionally, much more than was expected," he told The Gleaner during Wednesday's trade show hosted by the JGRA at Spanish Court Hotel, New Kingston.
Chong said operators in the petroleum retail trade would find it very difficult to remain in business, if the Government does roll back the additional special consumption tax of $5.67 per litre on 87 and 90 grades gasolene and $6.70 per litre on automotive diesel which took effect on March 13.
In addition, the revised calculation of property taxes based on 2013 valuations could see some owners paying a 1,000 per cent increase.
The Government has opted to adopt the 2013 Valuation Roll, but with significant reductions in the property tax rates, moving from the higher rates of 1.5 per cent 2 per cent to the much lower range of rates between 0.8 per cent 1.3 per cent on the new valuation roll.
"We are going to watch and see if the Minister will rescind his decisions because I think that civil society will have things to say and they're saying it already. We have said what we had to say to the minister, maybe not in the public domain but it must be recognised that there must be a different way to do business than taxation of this level," the JGRA president explained.
... Trade already under siege
Chong said his members were mindful of their responsibilities as good corporate citizens and so were not averse to paying taxes, given the integral role of this revenue channel for the country's development. However, he warned that the petroleum retail trade was already under siege and could not endure any more shocks.
"We have to be careful of how we discount things in this economy because the dealer's margin is getting smaller and smaller and we are probably the only members of the industry that have not increased their margins year after year. We can't hold out much longer," Chong admitted.