Phillips says no major increase coming; JLP warns Gov’t
BY INGRID BROWN Associate Editor - Special Assignment email@example.com
FINANCE Minister Dr Peter Phillips yesterday insisted that Jamaicans do not have to brace for any 'major tax increases' when the budget for the next financial year is read, next month.
However, he did not immediately rule out additional taxes, noting instead that if there was any, it would be minor.
"If there is anything, there may be tidying up measures, but we have no plans for any major increases in taxes," he said, adding: "The word there may be major; there may be none, (or) there may be minor tidying up issues to correct certain imbalances."
When pressed further as to whether Jamaicans should brace for more or significant tax increases, Phillips repeated that "there is no need for Jamaicans to fear the budget".
"There is no need to brace on account of the budget that is forthcoming... who has ears to hear let them hear," he told journalists at the weekly Jamaica House Press Briefing held at the Office of the Prime Minister in Kingston.
But apparently unimpressed, the Jamaica Labour Party (JLP) yesterday warned against the imposition of any new taxes in the upcoming budget which will be presented to Parliament on April 4 and debated on April 18.
Chairman of the JLP Robert Montague said news reaching the party was that there were discussions about a possible new round of tax increases to be tabled in the new budget.
The JLP, he said, was warning the Government that any such move would be vehemently resisted by the Opposition, as even the thought of a new tax package was intolerable.
"The people of Jamaica still haven't been able to digest the last one imposed by Dr Phillips, and we are unable to see any prospects of growth," Montague said in a statement to the media.
According to Montague, the last tax package was having a devastating effect on Jamaicans of all walks of life and a stifling effect on businesses. He said the rapidly sliding dollar had meant that many Jamaicans were now suffering significant hardships not seen since the 1970s.
"The last tax package and the sliding dollar have together caused significant increases in the prices of many goods and additional pressure on persons with fixed income such as pensioners," Montague said, adding that the Government had increased land tax by over 100 per cent.
"So, to think they would even consider additional taxes shows how out of touch and uncaring they are."
Yesterday, the finance minister said that at the end of the recently concluded three-day retreat, Cabinet had approved a budget consistent with the 7.5 per cent primary surplus in line with Government's intention to reduce the share of debt and debt service on the budget as a proportion of the Gross Domestic Product.
"So, in real terms, we have a budget that will be reduced, but which is an important element in our economic reform programme," Phillips said.
Government, he explained further, would also be maintaining an overall deficit target.
"We will not adjust those... so that any expenditures will have to be tailored to meet revenues, and that is how we shall operate," Phillips insisted.
He suggested that, in nominal terms, the budget would be higher than last year's, but in real terms would involve a real reduction.
But he noted: "Outside of debt and debt service we maintain the commitment to education and health as major priorities and the cabinet instructed a specific focus on social protection and children issues."