JAMAICANS will, on January 1 next year, start feeling the severe bite of a $21.8-billion tax package — part of what the Government had to commit to in order to qualify for the US$1.2-billion loan from the International Monetary Fund (IMF).

The tax package, the third for the fiscal year, was announced in Parliament yesterday by Finance Minister Audley Shaw and included an increase in the General Consumption Tax from 16.5 per cent to 17.5 per cent and the inclusion of several food items and services that were previously not taxed on the GCT base, from which the Government expects to net $3.6 billion and $6.2 billion respectively.

In addition, residential customers will now be expected to pay GCT on electricity usage exceeding 200 kilowatt hours per month, which the Government said would rake in $1.2 billion. However, our calculations, based on JPS electricity sales, show that the figure will be closer to $3 billion.

Motorists will also once again be hard hit as the Special Consumption Tax on fuel will be increased by 15 per cent, contributing $9.4 billion to the Government coffers.

Smokers will also be forced to pay more as the Special Consumption Tax on cigarettes is being increased from the current $8,500 per 1,000 sticks to $10,500 per 1,000 sticks — adding $1.41 billion to the public purse, 20 per cent of which the Government said will be remitted to the National Health Fund.

Last night, cigarette manufacturers Carreras said they would be undertaking a comprehensive assessment of the latest increase, pointing out that it was the fourth in two years.

Carreras pointed to a 23 per cent jump in 2007, followed by 100 per cent hike in 2008, then a 42 per cent increase in 2009 with another 17 per cent added in quick succession, to take effect on January 1, 2010 as justification for the assessment.

“As soon as this assessment is complete, the Management of Carreras Limited will be making a fulsome statement on the way forward,” the company said in a news release.

The earnings from the five revenue measures will net the Government an estimated $21.8 billion.

“Achieving a sustainable medium-term fiscal path requires implementation of a number of the measures to be implemented January 1, 2010,” Shaw said yesterday. “These are intended to enhance government revenue and curtail the fiscal deficit.”

But while items like tickets for international travel, infant formulaa, rice, counter flour, school uniforms, contraceptive devices and substances, among other things, are now exempt from GCT, consumers will now have to pay GCT on fresh fruit and vegetables, ground provision, legumes, onions and garlic, as well as on meat and poultry.

In addition, fish, cornmeal, corned beef, pickled mackerel, herring, shad and dried salt fish, canned sardines, canned mackerel, bread, buns, bullas, biscuits and crackers, sugar, salt, eggs, patties, rolled oats and baking flour will now attract GCT.

Other essential items such as cooking oil, syrup, fish, cock and noodle soups, corn, disposable diapers for the incontinent, sanitary towels and tampons and even children’s picture books and painting books will also attract GCT.

And not even the dead will be spared as services rendered by an undertaker in relation to a burial or cremation, including the supply of coffins, will be taxed as well.

Shaw yesterday said the measures, while not “amicable or popular”, were “appropriate and pertinent”.

Since presenting its 2009/10 budget in April, the Government has had to back-pedal on a number of commitments and also increase its budget from the original $555 billion to $561 billion despite warnings from the Opposition that the spending plan had been “unrealistic” in the first instance.