Jamaica PM could announce tax ease

Among the measures which sparked the most outrage were the increase in the General Consumption Tax (GCT) from 16.5 percent to 17.5 percent. (File photo)

KINGSTON, Jamaica, December 23, 2009 – Jamaicans will hear tonight what taxes Prime Minister Bruce Golding will roll back, following a review of a J$21.8 billion (US$246 million) tax package that has led to widespread outrage and street protests.

Golding said he would address the issue on all radio and television stations at 9 pm.

"I propose to address the nation through a national broadcast...in which I will outline the changes to the tax package as announced last Thursday,” he said yesterday. “Every effort has been made to minimize the impact on the majority of the Jamaican people who we know are already burdened by the impact of the global recession.”

However, he said that it must be recognised that the widening gap between Jamaica’s revenues and expenditure “must be cauterized” as an essential prerequisite for an International Monetary Fund (IMF) programme and the support of the other multilateral institutions.

The decision to take another look at the measures which were to take effect on January 1st, was taken following a series of meetings with members of the Cabinet and a technical team from the Ministry of Finance.

A government statement said a number of new proposals were discussed, but it did not say what those were.

Among the measures which sparked the most outrage were the increase in the General Consumption Tax (GCT) from 16.5 percent to 17.5 percent; and the reduction in the number of items exempted from the tax which would see food items including bread, canned sardines, mackerel, fresh fruit and vegetables, meat, poultry, fish, and corned beef, attracting the tax.

In his statement, Golding also indicated that the proposed IMF programme would be the subject of discussion in Parliament very soon.

“We will facilitate a debate in Parliament early in the New Year, not only on the details of the proposed IMF programme but on the medium term economic strategy and performance targets as well as the policies to be pursued to stimulate economic growth and job creation,” he said.

Despite Golding’s announcement on Monday that he would review the tax package, the youth arm of the opposition People’s National Party (PNP) went ahead with a protest that ended outside Jamaica House yesterday.

"We will be back on the road on the 25th of December if no change comes to this tax package. Maybe the Prime Minister will come to his senses by the 25th, but this has to be reversed before the 1st [of January]," the PNP Youth Organisation president, Damion Crawford declared.

The PNP is also expected to go ahead with six “peaceful and disciplined” protests across the island today.