By Vernon Daley, Parliamentary Reporter
Audley Shaw, Jamaica Labour Party's Spokesman on Finance, makes his contribution to the 2003/04 Budget Debate yesterday in the House of Representatives. At right is Mike Henry, JLP MP for Clarendon Central. - Rudolph Brown/Staff Photographer
CONSUMERS WILL have to pay more for foreign goods as a result of the proposed cess on imports, Audley Shaw, the Jamaica Labour Party's spokesman on Finance, warned yesterday.
In his wide-ranging contribution to the 2003/2004 Budget Debate in the House of Representatives, the Opposition spokesman derided the Government's $13.8 billion tax plan and called on the administration to scrap the proposed four per cent cess on imports.
Even though the Government has argued that the cess is merely a credit against income tax payments for importers, Mr. Shaw claimed that it was "ill-conceived" and would saddle businesses with increased costs that would have to be passed on to consumers.
"It is a most hostile, anti-business tax which should be immediately reversed before its full impact is felt. It is a backward move," Mr. Shaw said.
He added: "The cash flow of businesses will result in their having to borrow at a very high interest rate. This cost will be built into the selling price of imported goods."
Most of the new taxes announced on Thursday by Dr. Omar Davies, the Finance and Planning Minister, will be derived from adjustments in the General Consumption Tax (GCT) and the imposition of a four per cent cess on all imports.
The cess will bring in about $3.4 billion while the elimination of exemptions and zero-rated items under the GCT should yield another $8.17 billion.
Mr. Shaw argued that the massive tax package announced by the Finance Minister lacked credibility because the Government failed to slash waste from the administration.
"Such cuts would at least have given the overburdened taxpayers hope that these further sacrifices demanded of them will yield economic benefits in the near and medium term," he said.
Also, the JLP spokesman claimed that among the items which would now be brought within the GCT net under the new tax plan are pharmaceutical
Says tax package lacks credibility
drugs, agricultural tools and supplies, construction and financial services, residential rental and dental and medical supplies.
In announcing the broadening of the GCT base last week, Dr. Davies declined to specify which items would be caught in the net. He said, however, that some items like capital goods, imports, water, electricity and food items would continue to be exempt.
The full list of the items to which GCT will now apply is expected to be released by the Finance Ministry today.
Mr. Shaw attacked the Government for what he said was its record of economic stagnation, corruption and mismanagement. "Waste and corruption in public expenditure have now become the hallmark, if not the constant companion of the Government," he said.
Also, he criticised the Finance Minister for excluding from his Budget presentation, projections for growth in the economy this year and likely movements in interest rates.
