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Tax reform, debt stability key to upcoming budget

Published:Monday | March 26, 2012 | 12:00 AM

Tax reform and the stabilization of the debt indicators will be key objectives in the 2012/13 budget to be tabled in Parliament in April as the Government responds to the International Monetary Fund (IMF) to take strong policy action to return the country to solid economic growth.

Both the IMF and the Government have also concurred that those issues should be confronted simultaneously by strengthening public finances through comprehensive tax reform, tighter control of expenditure and a greater focus on enhancing the overall competitiveness of the Jamaican economy.

Tax reform would be implemented both to ensure revenue effectiveness and to influence real production, according to a statement issued Thursday by the Ministry of Finance.

Those agreements followed the March 8 to 21 visit to Jamaica of an IMF team, led by mission chief Luis Breuer, which conducted an article four consultation and initiated discussions on an economic support programme for the country.

The International Monetary Fund (IMF) and the Jamaican government have concurred that strong policy action was needed to place Jamaicas debt ratios firmly on a downward trajectory and to address the challenge of slow growth, according to a release from the Ministry of Finance.

At the same time, there was agreement that while those changes were being implemented there was a particular need to enhance social protection for the most vulnerable.

The IMF expressed a willingness to work with Jamaica in formulating a medium term strategy to overcome these challenges, including providing technical advice, the release said.

The Ministry said the Government was formulating such a strategy, the first phase of which would be implemented through the fiscal budget for financial year 2012/13.

Discussions with the IMF on the elements of a programme of longer term support for theGovernments medium term framework are set to continue in April.

The Government has committed to keep the country fully briefed on the terms of any such engagement.

In addition to Government members, the mission engaged leaders and groups in the private sector, including bankers, business persons, as well as trade unions in Kingston and Montego Bay.

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