JPS says no plan for 'retroactive' GCT

BY ALICIA DUNKLEY Observer staff reporter dunkleya@jamaicaobserver.com

Tuesday, January 05, 2010

LIGHT and power company the Jamaica Public Service (JPS) yesterday moved to allay fears that customers will be hit with retroactive amounts on their March electricity bills because it had failed to meet the January 1 deadline for the implementation of a 10 per cent General Consumption Tax on electricity usage over 200 kilowatt hours (kWh) per month.

This, after the Opposition spokesman on energy, Phillip Paulwell, "warned against the imposition of a retroactive application of GCT on electricity".

"...We are strongly and resolutely against any retroactive application of the GCT on electricity. The people of the country should not have to pay for the incompetence and bungling of this JLP (Jamaica Labour Party) administration," he said in a statement, yesterday.

The PNP on Friday raised fresh concerns at the revelation that the JPS could not accommodate the GCT before March. The party went further to predict that Jamaicans would be further taxed to fill the revenue fallout from the delay.

But yesterday, corporate communications manager at the JPS, Winsome Callum, said "there had been no discussions on the issue of applying the GCT retroactively".

"What we are working on is to implement the new billing arrangements in March so when you get your electricity bill in March it would be for consumption in February. So you would actually be paying the GCT on the electricity you consumed in that month. It (new billing arrangement) would apply to the electricity consumed in February," Callum explained.

On December 17th last year, as part of a new $21.8 billion tax package, the Government announced that residential customers would be required to pay 17.5 per cent GCT on electricity usage which exceeds 200 kWh hours per month, effective January 1. The measure would earn the Government $1.2 billion.

A week later the administration recanted, saying instead that customers who use less than 200 kwh per month will not have to pay any GCT on their light bills but said the top 22 per cent of residential customers who use more than 200 kwh per month, will now be required to pay a special 10 per cent GCT on whatever electricity they use in excess of 200 kwh each month. The measure, which was originally expected to yield $1.2 billion, would then yield $711 million with the reduction.

Presently the number of residential customers on the JPS record who use over 200 kWh stands at just over 100,000. The GCT would also apply to the electricity used by over 60,000 business customers. This number does not, however, include entities that are "zero-rated".

Yesterday, Meris Haughton, director of communication at the Tax Administration Services Department, pointed out that the 'Provisional Collection of Tax General Consumption Tax Number 23, Order 2009', which allows for the addition of GCT to electricity charges as announced by the administration last year, has the effective date of February 1.

"The... order... which covers a number of other issues in part (6) speaks to electricity services and tells the applicable rate and the effective date which in this case is the first of February 2010," Haughton told the Observer.

"The GCT Act has been in existence since 1991. Periodic changes are made to it under the Provisional Collection of Tax Act which speaks to specific amendments under the Collection of Taxes Act which is what this Order has done. It has made an amendment to Part Six of the GCT Act," she said, adding that such an order does not necessarily have to go before Parliament and is signed by the finance minister.

Did you watch American football's Super Bowl on Sunday?
	Yes, but just for the advertisements
	Yes, just for the game itself
	Yes, for both the game and advertisements
	No, I did not watch the Super Bowl.

View Results
Results published weekly in Sunday Finance

Username:
Password:

Stephen Marley wins Grammy

JPS says no plan for 'retroactive' GCT