Phillips announces new gas tax among raft of new revenue measures
Finance Minister Dr Peter Phillips this afternoon announced an increase in the specific Special Consumption Tax on gas in the amount of $7 per litre for E10 87, E10 90 and diesel oil.
The increase in the tax on fuel to be imposed on oil refinery, Petrojam, was among 12 measures Phillips announced with the expectation of raising $10. 348 billion dollars to help plug the shortfall in the $641.56 billion budget.
The increase will take effect next Wednesday, and Phillips is warning against any "unjustifiable increases" at the pumps.
Proposed revenue measures:
1. Amendment to the taxation regime for life insurance companies (to raise $0.00)
2. Increase in the Special Consumption Tax (SCT) on cigarettes (from $10.50 to $12) (to raise $488 million)
3. Increase in the specific SCT rates on Petrol (i.e. E10 87, E10 90, Diesel and Ultra Low Sulphur Diesel by J$ 7.00 per litre (to raise $6.412 billion)
4. Replacement of the 1.0 per cent Petroleum Cess to a specific SCT of $2 per litre (to raise $1.824 billion)
5. Increase in the general Personal Income Tax (PIT) threshold to $592,8000 (to raise $644 million)
6. Re-introduction of GCT on electricity for residential customers (with an increased threshold of 350 kWh) at the standard rate (to raise $807 million)
7. Rationalization of the environmental levy- Introduction of the 0.5% on Domestic sales (excluding the services sector) (to raise $962 million)
8. Rationalization of outdated fees – trade & business licence (to raise $500 million)
9. Rationalization of Outdated fees – Excise Unit (compliance measure)
10. Reduction of Import Duties (CET) on horses from 40% duty to 5% duty (to raise $1 million)
11. Full implementation of the elimination of zero-rating under the GCT for government purchases (with exception of public schools and the Jamaica Defence Force) (Compliance measure)
12. Withholding tax on specified Services (at a rate of 3%) (compliance measure)
Total revenue projected = $10.348 billion