MINISTER of Finance and Planning Dr Peter Phillips says that Jamaica will have to take difficult tax decisions if it is to compete with the developed countries which are attracting Jamaicans.

“You know why some of the developed countries that we all admire, and people line up to get visas to go to these places; one of the things about those places is that when you don’t pay the taxes, they deal with you swiftly and comprehensively,” Dr. Phillips told the House of Representatives, Tuesday.

“That’s why their schools have all the facilities that schoolchildren need. That’s why their roads and their cities have all the facilities and libraries for better-educated populations. That’s why those places are developed more than others which are not. Because they take the difficult decisions that have to be taken in order for the country to move å he closed the debate on the Income Tax (Amendment) (No.2) Act, 2015, which is also referred to as the Transfer Pricing Bill.

The minister was responding to concerns raised by Opposition spokesman on finance and planning Audley Shaw, during the debate, that the maximum penalties included in the Bbill were “draconian”.

Shaw said that the penalties were not only “draconian”, but also needed clarification as to how they would be applied, in terms of the link to the magnitude of tax at stake and the level of openness and cooperation with the taxpayer.

“The imposition of excessive penalties, especially in the context of complex legislation that has inherent uncertainties, will act as a disincentive to foreign direct investments,” the Opposition spokesman suggested.

He said that it was also unclear as to what extent the penalties might be payable by an individual, and who would be liable for imprisonment. But Phillips said that the question of imprisonment and fines was not a matter for his ministry and should be determined by the courts.

Phillips added that parliamentarians should stop promoting the view that to give public officials authority and power is to somehow create dictators.

“It is not so. We have never approached it so. They have never approached it so. I can’t speak for that Administration, but I can say that we have operated on the basis of participation, accountability, transparency, and a willingness to collaborate. All we seek is that when the rules are applied, Jamaica gets its fair share of the revenues arising from wealth created in Jamaica,” he said.

Transfer pricing refers to the pricing of goods and services between related or connected companies.

People who breach the requirement for certification, or who produce incorrect or incomplete certification are liable on summary conviction in a Resident Magistrate’s Court to a fine not exceeding $2 million, and in default of payment to imprisonment to a term not exceeding 12 months.

The House accepted a proposal from Phillips to suspend the vote on the Bill pending further consultations between the Government, the Opposition and the stakeholders, following a request to that effect from Shaw.