News

Phillips to dive into tax regime

Inside Parliament

With Balford Henry

Sunday, May 25, 2014    

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MINISTER of Finance and Planning, Dr Peter Phillips is to table a ministry paper in Parliament on the proposed changes to the tax regime, which he announced in the House of Representatives on May 20.

The minister's failure to table a ministry paper with the announcement last Tuesday adds validity to the argument that the government is using every possible means to push through its economic programme, even at the expense of debate.

By making the announcement through a statement, Dr Phillips limited the Opposition's response, and even that of its back-benchers, from debating the amendments to seeking clarifications through questions.

This raises the question: What about the validity of the Parliament as an instrument of debate, to protect the interests of the people represented by the Members of Parliament?

Dr Phillips' statement dealt with changes to the GCT Act to allow for the regularisation of the benefits currently enjoyed by free zone operators; benefits to the car rental sector, tour operators and contract carriage operators on Common External Tariff (CET) payments; expansion of Productive Inputs Relief (PIR) to include animal feeds; suspension of customs duty on cellular phones; and a reduction in the specific ASD (additional stamp duty) paid on alcoholic beverages in the hotel sector.

A statement from a minister in Parliament only allows for questions to be asked by the Opposition to seek clarification. It does not permit debate. In the context of which the Opposition spokesman on finance and planning, Audley Shaw, asked why no protection was given to white rum, a local product, while benefits were being offered for beers, wines, liquors and cordials, which are imported.

In questioning the minister, Shaw seemed to have missed an even more important issue arising from the minister's statement, which read:

"The purpose of the amendment is to provide for a reduction in the specific ASD paid on alcoholic beverages. The change is being taken consequent on:

* "The impact that the unification of the specific consumption tax is likely to have on the tourist industry's continued competitiveness.

* "A more rigorous calculation of the revenue to be garnered from the alcohol measure, which revealed that significantly more revenue would be received."

The issue is about the second reason given by the minister for the reduction, that "a more rigorous calculation of the revenue" from the measure had "revealed that significantly more revenue would be received".

Consider, that the Government went ahead and imposed the measures on the other sectors, leading to increased prices effective on April 22 without delay, but delayed imposition on the hotel sector, because that sector raised concerns about the effect on its stakeholders.

Further consider, that the delay allowed for a "more rigorous calculation" which proved that significantly more revenue than the $844 million projected would have, or could have been achieved certainly raises questions about the efficiency of the government's tax experts in determining how best to impose tax on Jamaicans.

The public certainly deserves an explanation as to what led to the ministry's sudden discovery that it would have earned more revenue from the measure than it had actually calculated, and whether the local white rum industry does not deserve some of the benefits that flow from that sudden discovery.

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