Golding scorns Clarke’s ‘no new taxes’ boast
Opposition Leader Mark Golding says the finance minister’s heralding of “no new taxes” in his opening Budget Debate presentation last week rang hollow, noting that over fiscal years 2021-2022 and 2022-2023, the Government raked in an additional $208 billion in taxes or an overall 34 per cent increase over what was projected.
“The massive increase in the amount of taxes collected from the people over the past two years brings to light just how hollow is the refrain of ‘no new taxes’ that was bellowed in this House, to the predictable but fundamentally empty beating of tables,” Golding said.
Golding argued that the 34 per cent increase in taxes collected over the past two fiscal years is significantly greater than the accumulated inflation over that two-year period, which is projected to be 12.3 per cent.
“So the taxes a bite the people and a suck out dem blood,” Golding charged.
“It comes in a period where people’s living standards are being ravaged by the cost-of-living increases,” he said.
The Government fiscal policy paper points to $766 billion in taxes that will be collected from Jamaicans this fiscal year.
This represents $150 billion – or over 24 per cent – more taxes than the $616 billion the Government collected in financial year 2021-2022. It is also $95 billion more than the $671 billion in taxes originally budgeted to be collected this fiscal year.
Golding said that the Government is projecting to collect $824 billion in taxes in the upcoming 2023-24 fiscal year. That is an increase in tax collections of over 34 per cent over the two fiscal years from April 2022 to March 2024.
“And these massive increases in taxes weren’t limited to the last two years, but if we look at the last seven fiscal years, the tax take has increased from 24.4 per cent of gross domestic product (GDP) to 28.2 per cent of GDP, placing Jamaica among the highest taxed countries in the world,” charged the opposition leader as he made his contribution to the Budget Debate in the House of Representatives on Tuesday.
Giving a further breakdown of the taxes extracted from an individual since the Holness administration took the reins of Government in 2016, Golding said that the tax take from every Jamaican (15 years and older) has increased from $197,000 in 2015-16 to $365,000 in 2022-23, an increase of 85 per cent.
“This JLP (Jamaica Labour Party) administration is now extracting an additional $168,000 from the pockets of every Jamaican. Then they come with the samfie statement ‘bout no new taxes,” he added.
With the majority of taxes locally collected indirectly, Golding said that the poor and lower-income earners bear the brunt of it in paying the general consumption tax on purchases, which is projected to increase by 31 per cent, or $156 billion, in the new financial year.
Golding also took Finance and the Public Service Minister Dr Nigel Clarke to task for apparently ignoring his suggestion to cap the ad valorem special consumption tax on gas this fiscal year. The opposition leader argued that this would have given motorists, transport operators and electricity consumers a break. He said the tax was based on an average projected world oil price of US$67.50 for the year.
He explained that the ad valorem gas tax is a percentage of the price of gas and other petroleum products, so the higher the oil price, the higher the amount of tax charged for each litre of gas.
“The mechanism I proposed was to cap the tax at the budgeted oil price of US$67.50, so that the people would not suffer any additional tax if and when the oil price went above US$67.50, and the fiscal targets for the year would not be affected,” said Golding.
He further added that he had drafted the order to cap the gas tax and delivered the document to the Ministry of Finance.
“I never received a reply, and never heard a word from the minister on the gas tax cap,” he said.
Golding said that the average oil price over this fiscal year has been above US$90.00, and the Government has benefited from billions of dollars of gas tax by refusing to cap the tax at the budgeted price of US$67.50.
The opposition leader said that the special consumption tax on imports for the first nine months of the year was J$7.8 billion or 18 per cent above budget. This, he said, was in line with his projection regarding the amounts consumers would have saved if the cap had been put in place.
“Well, since you didn’t listen last time and it has bitten everyone in their algorithms, please, for the sake of the Jamaican people, listen this time,” said Golding to Clarke.