Opposition spokesman on finance, Audley Shaw, says that he has serious doubts about the tax reform policy, promulgated in the Tax Reform White Paper tabled in the House of Representatives last week, meeting the international Monetary Fund’s (IMF) approval.

“It is very non-specific, and I seriously question whether the IMF will consider this a meaningful and game changing tax reform policy,” Shaw told the Business Observer, yesterday.

He said that the policy stated in the White Paper was “very watered down” and lacked the game changers which formed part of the Jamaica Debt Exchange (JDX) which he launched in January 2010.

According to the Opposition spokesman, the JDX sharply reduced border taxes/custom duties and reduced the incentive for fraud and tax evasion, as well as reduced the need for tax waivers as a significant tax game changer.

He said that it would have been more important for the government to widen the taxable base of the General Consumption Tax (GCT), to include basic food items, and plough some $2-$3 billion, in direct transfers, to the social safety net programmes to mitigate the effect on the poor and vulnerable.

He said that the widening the GCT base would ensure that the benefits of the subsidy would go to the poor and most vulnerable, and not be absorbed as well by the middle class and wealthy persons, who do not need the level of protection provided by the subsidy, and would have allowed the Government to reduce GCT from 171/2 per cent to 12 per cent, instead of the marginal one per cent decrease included in the 2012/13 tax measures.

“That would have been a major game changer,” the former minister said.

He also accused the Government of reversing the trend he started in April 2011 reducing the Common External Tarrif (CET) on imported motor vehicles from 40 per cent to 20 per cent, by increasing it to 30 per cent in the 2012/13 budget. He said that this has resulted in a loss of some $2 billion in government revenue,, due to the softening of local demand for motor vehicles with the subsequent increase in prices.

Shaw was also disappointed that while the White Paper touched on the issues tax incentives, preferences and waivers, it did not offer a clear policy prescription as to how they will be dealt, pending a review of the system.

The long awaited Tax Reform White Paper was tabled in the House of Representatives last week Tuesday, by Minister of Finance and Planning, Peter Phillips. It is considered a pre-condition to an agreement between the Government and the IMF. A Government White Paper is a policy document, approved by Cabinet and tabled in Parliament.