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Shaw says SCT on heavy fuel oil will affect light bills, suggests he never said otherwise

Published:Thursday | June 16, 2016 | 12:00 AM
Audley Shaw ... the ministry says his comments at the May 13 post Budget Press Conference were not geared towards the impact of the SCT on LNG and heavy fuel oils.

Finance Minister Audley Shaw has confirmed that the Special Consumption Tax (SCT) on heavy fuel oils will affect the Jamaica Public Service (JPS) suggesting that he never said otherwise.

Responding to The Gleaner/Power 106 News today, a statement from the ministry said when the Finance Minister was speaking at the Post- Budget Press Conference on May 13, he was responding to a question posed on the impact of the $7 increase in SCT on fuel used for the purposes of ground transportation.

However, a review of the recording of the press conference indicates that Shaw made the remark in his opening presentation and not when questions were being posed.


Finance Minister Audley Shaw speaking at a Post-Budget Press Conference on May 13, 2016

" I've seen certain comments, some from the Opposition, crying out lout about the likely inflationary effect of the tax package and I just want to say on that I had, in the course of putting the package together, consulted with the appropriate authorities including the governor of the Bank of Jamaica who is here and that the tax package is nominally expected to impact inflation in almost a negligible way at just about 0.2 per cent impact on the inflation rate. So that is quite negligible in terms of the inflation rate.  The argument also is that JPS light bills will go up as a result and I want to remind everyone that this tax does not apply to the JPS at all. I repeat, the Special Consumption Tax increase does not apply to the Jamaica Public Service. It is only related to SCT for fuel for road transport only," he said.

READ: Shaw defends tax plan

The Ministry says Shaw's comments were not geared towards the impact of the SCT on LNG and heavy fuel oils.

"There were no questions posed about the effect of the increase in the overall SCT (specific and ad-valorem) of HFO," said a spokesperson from the Finance Ministry.

The JPS announced on Monday that customers will see an average 12.8 per cent increase in their bills this month because of the SCT on heavy fuel oil, the devaluation of the dollar among other reasons.

According to Shaw, the tax announced in May represents a "mere" 2.3 percentage points of the 12.8 per cent increase that the JPS intends to apply to electricity bills this month.

Detailed calculations show that the SCT accounts for an overall 18 per cent of the increase in light bills.