KINGSTON, Jamaica—The vote on a measure to amend the General Consumption Tax (GCT) that would result in the removal of the tax from imported raw foods was deferred by the House of Representatives on Tuesday after Opposition members raised concerns about how it would impact local farmers.

Opposition members also questioned the timing of the Government’s decision, pointing to the current tariff war among major economies and the likely effect on developing countries like Jamaica.

West St Andrew Member of Parliament, Anthony Hylton, and Opposition Leader Mark Golding, the member for St Andrew Southern as well as the Opposition Spokesman on Finance, Julian Robinson, St Andrew South Eastern, all noted that developed countries provide significant subsidies to their farmers.

They also questioned which countries had raised concerns with the World Trade Organization (WTO) about Jamaica having an unfair advantage with its imposition of GCT on foreign foodstuff.

In the end, the vote on the order – ‘The Standardising of Jamaica’s GCT Treatment on raw Foodstuff’ was postponed. It seeks to amend the Third Schedule of the GCT Act to implement tax treatment for both domestically-produced and imported raw food stuff.

Williams told the House that both the United Kingdom and the European Union had raised the issue at the WTO last year and had asked that Jamaica takes corrective action. She pointed out that “by virtue of Jamaica’s membership to the WTO, the country is not allowed to implement internal tax measures designed to protect domestically-produced products”.

“The utilisation of GCT which is an internal tax currently charged on imported raw foodstuff but not locally-produced raw foodstuff, could be interpreted as a measure that gives protection to domestically-produced raw foodstuff,” she stated.

The finance minister said that this is considered an uncompetitive practice from the perspective of international trade and noted that “Jamaica risks in the very least, jeopardising its relationship with its trading partners”.

Therefore, both domestically-produced and imported raw foodstuff will now be exempt from the payment of GCT. It applies to: fresh fruits and vegetables, ground provisions, legumes, onions and garlic, meat, chicken, fish, crustacean, molluscs and corn.

Williams pointed out that despite the removal of the GCT, the imported items still attract taxes, including Common External Tariff and additional stamp duty.

“The removal of the GCT on imported raw foodstuff preserves our international trade relationships by removing the risk that Jamaica will face trade sanctions from other member states as a result of the discriminatory treatment applied to imported raw foodstuff,” Williams said.

Robinson had asked the minister which countries had raised the objections and where within the WTO the dispute had progressed to.

“Did these objections take place within the ambit of the WTO which has a process to deal with objections of this nature?” he asked.

Robinson warned that the “removal of GCT on imported items has the potential to negatively impact the local agriculture sector”.

“Notwithstanding what anybody wants to say, we know that developed countries subsidise their agriculture industry to an extent we don’t,” he added. The shadow finance minister also wanted to know whether the decision taken to remove the GCT was arrived at after consultation with the Attorney General’s Department and other stakeholders.

“Because we don’t have a level playing field in this world and we don’t want to undertake measures that will negatively impact our local industry,” he said.

“I can hardly think of a worse time that we would want to bring this resolution because the rules affecting trade in the WTO have been totally upended,” Hylton remarked during his contribution to the debate.

“An environment has been created where developing countries are put at a distinct disadvantage and small developing countries at an even worse disadvantage,” he remarked.

“The reality is that we agreed to the rules-based system because there was some equity in it for the developing countries. That has now been turned on its head by current trade policies and measures being adopted by developed countries,” Hylton added.

He argued that the imposition of tariffs at this point in time means that “any consideration we may have had in terms of working with the rules to phase out some of these measures that we have imposed, I think we now have to consider that these are now protective measures in light of what is emerging, what is evolving in terms of trade policies being imposed in developed countries”.

“I believe the timing of this cannot be any worse because the impact on our local sector is real and damaging and it further puts us at a disadvantage by this removal of the tariff at a time when tariffs are being imposed,” he emphasised.

For his part, Golding said “We are now in an era where measures including tariffs, but not limited to tariffs, where all sorts of measures affecting trade are being touted, being pushed, being considered and it’s a very unsettled environment because we don’t know where it’s all going to end”.

The Opposition leader lamented that “Jamaica was removing a protective measure that was in place for the benefit of local producers of food”.

Golding also noted that the House was being asked to vote on the measure retroactively, it having already taken effect on April 1, 2024. He questioned whether this could open the government up to future legal action, since GCT has already been collected on the imported items.