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LETTER OF THE DAY - Devise equitable taxation model on income, alcohol

Published:Wednesday | May 9, 2012 | 12:00 AM


Reading through THE WEEKEND STAR of Friday, May 4, 2012, I was drawn to Leighton Levy's column 'Oh for some tax equity', which discussed the issue of taxation and the proposals of the Private Sector Working Group.

I strongly agree with his take on the current tax-reform proposals.

Jamaicans have been given a big leeway with taxation, and this has been a major downfall for the economy. The Government, in looking to lowering the income tax rates, has to balance the act by cutting the subsidies currently being granted on basic food items. This is better than milking the pockets of PAYE employees and casting them across the poverty line.

The issue of the alcohol taxation arrangement was also raised, and shows that our current system is an ad hoc one, which over the years was made even more inequitable. Why is beer, which contains the least on the alcohol-by-volume (ABV) scale, being taxed at the highest rate among the likes of vodka, rum, whisky and other spirits, which are significantly higher in ABV?

Kudos to the persons behind the the new tax-reform proposals, which logically suggest a uniform rate of special consumption tax on alcoholic beverages based on alcohol content.

Increase Government revenue

This, for sure, will see a significant increase in the country's annual revenue, which should have been the initial goal of any government. A recession cannot be combated with continuous government subsidies and giveaways when there are few resources to spare.

This new alcohol tax proposal, frankly speaking, is a very good way of collecting taxes and creating more equity in the alcohol market.

I do hope that our leaders and persons in places of influence read Leighton Levy's column and heed his advice.