Jamaicans are set to benefit from a big 53 per cent reduction in the General Consumption Tax (GCT) on electricity from the current 15 per cent to seven per cent.

The reduction will take effect after the next Budget in March 2025.

The announcement was made by Prime Minister Andrew Holness on Sunday as he addressed the 81st annual conference of the Jamaica Labour Party (JLP) at the National Arena in St Andrew.

The prime minister pointed out that up to 30 per cent of Jamaica Public Service Company (JPS) customers were unable to pay their electricity bills which contributes to illegal connections to the electricity grid.

Holness said JPS will also remove the non-tax threshold and replace it with an “incentivised, compatible rebate of GCT for persons who use 200 kilowatts of electricity or less per month”. This, he said, will allow for the roll out of pre-paid electricity purchase which the JPS will be required to implement nationally, but particularly in vulnerable communities.

Holness said that with the simplified GCT arrangement, JPS will also be required to introduce time-of-day pricing of electricity. This will allow customers to benefit from better rates by arranging how they consume electricity in off-peak hours.

The prime minister said the government will also scale-up its pilot project of onboarding customers in vulnerable communities through the community electrification house wiring programme. This provides households on the programme with electrical outlets, lights and switches and the General Electrical Inspector (GEI) certification.

“This will assist these communities in becoming a legal JPS customer. We reduce the tax burden on electricity and we will improve the efficiency of the electricity sector,” the prime minister stated.

“We will reduce the cost of living to you that electricity poses, and we will increase our growth prospects by having a more efficient electricity grid, thereby increasing our prospects for growing the economy,” he added.

Holness told the conference that “”we’re going to transform the fiscal structure of the electricity market in Jamaica to ensure that it aligns with incentives, reduces the cost of onboarding, and increase options to the consumer”.