THE government yesterday proposed to credit the planned payments under the controversial streetlight levy to people’s property tax, but the offer was immediately rejected by private sector groups and the political Opposition.

The Jamaica Chamber of Commerce suggested that the offer by Prime Minister P J Patterson was too complicated and should be abandoned, similar to the stance taken by the Council of Presidents of the Private Sector Organisation of Jamaica. At the same time the Jamaica Labour Party said it was a panic response that would be overly bureaucratic.

“This unnecessary, ill-conceived and costly bureaucratic system which has today been announced by the prime minister is a political manoeuvre which is unworkable and the Jamaica Labour Party will ensure that the cess will be removed when we form the next government,” said the JLP’s leader, Edward Seaga.

The government last week unveiled its proposal to attach a levy of 3.14 per cent on electricity bills, and said the money would be used to meet the cost of providing streetlights — for which parish councils now have a bill of more than $500 million a year.

The levy, to be collected directly by the now privately owned light and power company, Jamaica Public Service Company (JPSCo), was to have started with the April bills and was expected to raise $540 million dollars in the first year from about 500,000 electricity consumers.

However, private sector officials have complained that the levy will further undermine the country’s competitive position and several of them led a protest to Parliament on Tuesday where they met with Patterson.

Yesterday, Patterson, claiming it to be the result of “extensive dialogue and consultation” unveiled the government’s revised plan under which “all payments of cess for street light by property owners … during the fiscal year will be credited to their property tax account for that property”.

“That is to say, whatever payments are made for the street lighting cess will reduce the tax obligations for the property in question,” Patterson told reporters at Jamaica House. The property tax legislation would have to be amended to accommodate the proposal.

The prime minister said that the arrangements would be structured in a way so that tenants who pay the levy would enjoy the benefit rather than their landlords.

At the same though, Patterson said that the maximum credited to property tax would “not exceed the annual amount of property tax paid in the fiscal year”.

The meaning of this, however, remained unclear last night, given the prime minister’s earlier remark that “all payments of cess” would be credited to property tax accounts and what would happen in cases where the cess payment exceeded the tax liability.

In last night’s statement the Jamaica Chamber of Commerce declared Patterson’s proposal to be “complicated and, thereforem unacceptable”.

“The JCC says that while it appreciates the government’s attempt to resolve the issue it still supports the removal of the cess,” a statement said. “By way of a resolution the chamber suggests that the government should look to increasing its levels of efficiency and ensuring greater compliance in the collection of property taxes.”

The compliance rate on property taxes is about 45 per cent although some people can pay less than $100 a year.

Property values have not been revised for a decade, but the government is it is about to do that which at the current compliance rate would push the take to $2 billion from $600 million.

However, the administration has said that the increase amount would not be enough to meet demands for property-related services and in any event to inflows would be too slow for the light bill schedule.