Sat | Jan 20, 2018

New tax policy illogical, deceptive

Published:Tuesday | May 17, 2016 | 12:00 AM


In the Saturday edition of The Gleaner, it quoted Audley Shaw saying, "We can't be irresponsible and take away revenue and don't replace it with something. That would be fiscally irresponsible." This statement vindicates the People's National Party, Joseph A. Matalon and all those who poured contempt on the tax policy.

Ever since the Jamaica Labour Party (JLP) announced the tax-relief policy, we have been arguing it could not work. During the discussions in the lead-up to the general election, many advanced for the tax policy to work, we should expect increased taxes and cuts in social programme. For example, we have seen a 60 percent cut in the Jamaica Constabulary Force budget for goods and services. Also, a $15-million reduction in the administrative budget for the Ministry of Education. These reductions in social and administrative expenditures will have ripple effect on the efficiency of these institutions.

We have also seen an increase in the gas tax. I am most appalled by the introduction of taxes on liquefied natural gas, which was previously exempted from taxation. In the upcoming months, Jamaica will receive LNG to generate electricity. This was supposed to reduce electricity cost and allow our manufacturing industry to be more competitive. This was the intention of the Simpson Miller administration. So, taxing LNG runs counter to the original cost-saving policy.

It is illogical to cut a revenue source (income tax) and replace it with another revenue source (gas tax, etc.). Finally, it is deceptive for the JLP to say it has fulfilled the tax promise when every aspect of the promise was broken.