Tue | Sep 19, 2017

SCT exemption on the cards from beginning

Published:Wednesday | May 18, 2016 | 5:08 AM

THE EDITOR, Sir:

In the editorial of The Sunday Gleaner, May 15, 2016, under the heading 'Pragmatism triumphs in tax plan', the editorial writer seemed to have been searching very hard to find error in the arrangements to raise the threshold of the PAYE tax-exemption benefit, which a vast majority of the recipients openly welcome.

The editorial would seem to suggest that Finance Minister Audley Shaw should have made it clear that any tax on heavy fuel oil would not affect the price of electricity. Even a greedy-for-information editor has to still recognise that a minister cannot possibly include every piece of pertinent information in a speech to Parliament. That was why a press conference was held the next day at the Ministry of Finance.

Based on answers given by Kelly Tomblin, the president of the Jamaica Public Service (JPS) Company, and me during an interview on a local radio station, soon after the parliamentary debate ended, we were charged by your writer with contributing to the impression that the exemption for electricity was a "last-minute development".

I am quite unsure as to how that opinion could be drawn from our comments. Mrs Tomblin made it clear that she was out of office and had not been briefed in the short time between when the speech was given by Minister Shaw and the start of the radio interview. Indeed, it was I who pointed out to the interviewer that the $1.415 billion expected from the special consumption tax (SCT) regime on energy also included HFO and not just LNG as the interviewer had stated in the question. Interestingly, a Gleaner reporter had every opportunity to seek clarification on the HFO issue last Friday during the minister's press conference, but no such question was raised.

The Gleaner editorial writers have been on a roll against the PAYE tax exemption plan even before the new Government came to power. In the short space of time since the new administration was sworn into office and now, there may have been five or six negative or opposing editorials - including an expression that the whole plan should be abandoned, as mentioned by Minister Shaw in his parliamentary presentation last week.

Apparently, in their haste to punch holes in the Government's tax plan, the editorial writers got their dates mixed up. They had Mr Shaw speaking in Parliament on Friday of last week and Kelly Tomblin and me being interviewed right afterwards on Thursday afternoon! For the record, and to even out what appears to be a rushed piece of writing, Minister Shaw's parliamentary presentation was given on Thursday of last week, May 12, and he hosted a press conference the next day, Friday.

AUBYN HILL

Senator & Economic Policy

Adviser

EDITOR'S NOTE:

1. The Gleaner finds incredulous that with the majority of heavy fuel oil being channelled into the energy sector, the finance minister did not think it worthy of note to inform the country, in Parliament, that the special consumption tax would not be borne by the JPS.

2. The revenue document tabled in Parliament by the finance minister did not indicate any exemption of the SCT on heavy fuel oil.

3. The Gleaner's editorials have been crystal clear that Mr Hill's and Mr Shaw's tax-relief plan was convoluted, unworkable, and would have to be funded. Mr Shaw's decision to shelve the JLP's original tax plan, and formulate a new one, is an admission of this fact.