Tue | Jun 22, 2021

Tax reform proposals insensitive to the vulnerable

Published:Wednesday | March 14, 2012 | 12:00 AM

The Caribbean Community of Retired Persons (CCRP) has expressed concern that, if implemented, several aspects of the Private Sector Working Groups tax reform proposals would have a detrimental effect on the poor, elderly and retirees.

The CCRP said a committee of its directors and members met on March 6 and examined the private sector groups proposals, which contain 145 recommendations aimed at widening the tax net and raise J$7.3 billion in new revenue annually for government.

The CCRP concluded that the private sector group has not placed enough emphasis on, or took into consideration, the impact of its recommendations on the most vulnerable, the pensioners and those persons with no measurable or fixed incomes.

It is particularly concerned that no mention has been made of an increase to the existing J$80,000 annual tax-free ceiling for pension income, which has been in effect since 2010 and should be substantially increased.

The allowance of $80,000 per annum for persons over 65 has also been constant for some time but no increase is mentioned. This should also be increased, to a realistic liveable income, the group said.

It also suggest that the tax exemption limit of J$499,200 is too low and should also be substantially increased in view of the rising cost of living and since many persons must care for their elderly relatives.

The CCRP also believes general consumption tax (GCT) should not be applied to basic food items. This tax is skewed against the elderly when you consider that the majority of them have no pension whatsoever, the group said in a statement.

They suggest that property tax should be increased gradually instead of the single, massive increase proposed by the private sector working group.

It also suggests there should be no tax on dividends. Dividends are declared after all taxes are paid by the listed companies, and many seniors have invested in these shares to provide for their future. To revert to taxing dividends would be double taxation, the CCRP contends.

In addition, the group of retired persons is of the view that the working groups proposal to reduced GCT from 17.5 per cent to 12.5 per cent would be unrealistic. They recommend instead an interim reduction to 15 per cent and a subsequent study of the implications for any future reduction.

The CCRP was launched in April 2010, with the mission of working to ensure that the vast talent, experience and wisdom of seniors will be respected, and that they enjoy the quality of life they deserve.

The group has more than 600 members across Jamaica and said it continues to be extremely proactive in serving as a vital resource for retired persons, as well as for those preparing for retirement.

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