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Gov't says spotlight still on power costs

Published:Wednesday | April 11, 2012 | 12:00 AM

Daraine Luton, Senior Staff Reporter

MINISTER of Science, Technology, Energy and Mining Phillip Paulwell is seeking to reassure the nation that Government intends to honour its election promise to roll back the general consumption tax (GCT) on electricity usage.

"There is a commitment that was given to the people of Jamaica which we intend to fulfil," Paulwell said during yesterday's sitting of the House of Representatives.

He was responding to questions posed by North East St Catherine Member of Parliament Gregory Mair.

On the campaign trail prior to the December general election, Portia Simpson Miller, now prime minister, promised that a People's National Party Government would roll back GCT on electricity.

"That process will emerge at the time of the Budget," the energy minister said in relation to the promise.

Gct on electricity

At present, consumers of more than 200 kilowatt hours (kWh) pay GCT on electricity. Paulwell told the House that $1.64 billion was collected in tax this fiscal year.

Some 76 per cent of JPS customers use less than 200 (kWh) of electricity and do not pay the 10 per cent GCT.

Mair argued that "the true beneficiaries are the high-end consumers, residential and business".

Of the $1.64 billion collected this year, $550 million was from residential customers while $1.1 billion came from commercial and industrial users.

Relying on data provided to the House by Paulwell, Mair said only eight per cent of residential consumers would not benefit if the threshold is increased to 300kWh.

"That would mean that 92 per cent of residential consumers would not pay GCT and the total amount of GCT collected would reduce only by $250 million," Mair argued.

Paulwell said the suggestion would be given due consideration.

In the meantime, Mair has also proposed that monies collected by way of the tax be used to fund renewable energy projects.

To that suggestion, Paulwell said the ministry and the World Bank have teamed up to undertake, with dispatch, a comprehensive energy efficiency programme.