CO-CHAIR of the Economic Programme Oversight Committee (EPOC), Keith Duncan, says the Government may have to look at putting its flagship public works programme, Shared Prosperity through Accelerated Improvement to our Road Network (SPARK), on the chopping block and ditch plans for a reverse income tax credit if tax shortfalls seen in March persist in the current fiscal year.

Under SPARK, $40 billion has been allocated over a two-year period for improving and modernising more than 2,000 roads islandwide. But with the Government seeing tax revenues dipping by $25 billion in the fiscal year which ended on March 31 and indicating that if tax inflows continue to be significantly lower than expected, it may have to implement spending cuts “to ensure prudent fiscal operations and the attainment of legislated targets”, Duncan said one-off expenditures could be vulnerable for cuts and suggested the SPARK programme as one which could be targeted.

“If you look at the one-off expenditures, in there are capital expenditures like the SPARK programme [with] $20 billion [budgeted to be spent] this year and $20 billion next year. Those are one-off expenditures,” Duncan pointed out.

“Then you have [another] one-off [expenditure] like the reverse income tax credit,” he said, suggesting that the Government could look at cutting this planned expenditure if the situation persists.

In the budget debate earlier this year, Nigel Clarke, Jamaica’s finance minister, said the Government plans to give every registered taxpayer who earns $3 million or under a reverse tax credit of $20,000. An estimated 570,000 Jamaicans would benefit from the measure if it were to be implemented and would cost $11.4 billion.

“That’s a one-off and that is if all those who are eligible to take up the reverse income tax credit [actually] take it up. Well, we will see where that number [the cost of the reverse tax credit] comes out at.”

Duncan was quick to stress, “That’s my view” on the matter of the areas which the Government could cut, especially with it ruling out implementing taxes to cover the increase in what it plans to spend. Total government expenditure was programmed at $1.3 trillion this fiscal year, up 23 per cent from the $1.09 trillion spent in the last fiscal year.

“So, therefore, they are going to have to manage the expenditure profile because this Government is committed, as they have said, to no new taxes, so we don’t think they are looking to change that policy position at this point in time. I think they will probably look more on the expenditure side to look at making sure that they meet the fiscal balance and primary surplus targets.”