PSWG tax proposals would benefit majority of Jamaicans - survey
THE CARIBBEAN Policy Research Institute (CaPRI), yesterday said a survey it carried out on certain specific proposals from the Private Sector Working Group (PSWG) suggests most Jamaicans would benefit from their implementation.
The survey examined changes proposed for the PAYE system; the combination of a reduced general consumption tax (GCT) rate and removal of substantially all exemptions for goods with the exception of prescription medicines and medical appliances; and changes proposed relative to GCT on electricity.
"Of the 147 people surveyed, 113, or 77 per cent, recorded net gains from the combined effects of the reform measures while only 34 people, or 23 per cent, recorded net losses," CaPRI said.
The survey found that of those recording a loss, more than half were currently paying no personal income tax or related statutory deductions, thus strengthening the argument for broadening of the tax base and moving towards a more equitable system.
PSWG Chairman Joseph Matalon said the survey findings "validate the high-level impact estimates made by our technical team in our submission to the joint select committee of Parliament".
"The concentration of reform 'winners' in the lower income brackets also demonstrates the progressive nature of the PSWG's reform proposals taken as whole," he added.
The PSWG had suggested, among other things, the elimination of GCT exemption on items and a lowering of the GCT rate from 17.5 to 12.5 per cent. It also recommended that additional resources be put into the Programme of Advancement Through Health and Education to assist the most vulnerable.
In its draft report, a joint select committee of Parliament said it believed an efficient transfer mechanism must be put in place to address the needs of vulnerable income groups.