The Editor, Sir:

Your editorial of Sunday, January 18, pointed to tougher times ahead, after a 7.5 per cent shortfall in government tax revenues to November, 2008. Because of the recession, we should expect more shortfalls during 2009.

Increased taxation, or reduced spending on government services, or both, seem inevitable and will be equally unpopular.

Even with more loans, lower-cost loans from international agencies and, hopefully, some debt forgiveness from the Obama administration in Washington, the government faces tough choices. Increasing taxes are unpopular, whether from GCT, gasoline tax, income tax, import duties, government fees, etc. While I hope it is not necessary, it seems to me that we should expect some increase. But from where?

Gas protests

Increasing the tax on gasoline seems to me to be the least oppressive. Unpopular, yes - remember the gas protests in the early 1990s? Why least oppressive? Because:

Gas prices are lower now because of reduced demand for petroleum in the recession. The adjustment should be easier.

Where more money is needed to maintain our roads, the tax on gasoline logically targets road users.

Higher gas prices will encourage reduced consumption and lower import costs. Though limited, we can make some individual choices to ease the pain - buy more fuel efficient vehicles, drive more efficiently, reduce our driving, and share more.

Two other points are worthy of note. Dr Omar Davies, finance minister in the recent People's National Party government, had advocated a higher tax on gasoline and changing it to a percentage of cost rather than a fixed dollar amount per gallon, when trying to balance his budget.

Tom Friedman, the highly regarded journalist of The New York Times, described the experience of a smaller country in Europe - I believe it was Denmark - which increased its tax on gas dramatically. That is, even higher than the already high gas taxes levied by European governments. The aim was to reduce the high import bill on petroleum, and use the additional tax revenue to invest in alternative energy sources.

Imported petroleum

After about 10 years, its experience was dramatic, according to Friedman. A 90 per cent dependence on imported petroleum for energy was lowered to near 10 per cent. The policy decision encouraged manufacturers to develop highly effective wind turbines, which were installed to generate power locally and became a major export.

I wish for the government clear thinking when considering its budgetary choices, and to communicate with the people the need and basis for the tough choices to come.

I am, etc.,

DONALD DUFF

Kingston