AS the Government moves to extend General Consumption Tax (GCT) to overseas digital services, Opposition spokesman on science, technology and digital transformation Christopher Brown says the People’s National Party (PNP) is still scrutinising the proposal but is seeking clarification on how the measure will be implemented and the impact it will have on exporters of digital services.

The tax on digital services and intangibles supplied from abroad and consumed in Jamaica is a new revenue measure included in the Government’s 2026/27 budget. Finance Minister Fayval Williams told Parliament last week Thursday that the levy is expected to generate roughly $300 million in the next fiscal year, rising significantly in subsequent years.

Under the proposed change, services supplied over the Internet by companies without a physical presence in Jamaica — including video and audio streaming, cloud computing, and other digital “intangibles” — will be subject to 15 per cent GCT, much like locally provided services.

Williams emphasised the Government’s concern that, under the existing framework, identical services may be treated differently depending on where the provider is located.

The shift is guided by what the minister described as the “destination principle” — an internationally accepted standard for consumption taxes whereby tax applies where a service is consumed rather than where the provider is based.

Implementation of the new regime is expected in the fourth quarter of the next fiscal year, with full operational capacity set for the fiscal year beginning in 2027.

However Brown, who spoke with the Jamaica Observer on Sunday, said the Opposition is taking a measured approach before arriving at a final position, noting that the structure of the proposal must be clearly understood.

“We are still carefully analysing the full suite of taxation measures announced by the minister in the 2026/27 budget, including the proposed application of General Consumption Tax to digital services supplied from abroad and consumed in Jamaica. We recognise that this will affect services such as satellite Internet providers, global streaming platforms, and other overseas digital services that have historically fallen outside the local tax net, and we are seeking to fully understand the breadth, reach and design of this particular measure before offering a final position.”

Under Jamaica’s tax framework, GCT is typically applied to goods and services consumed locally. However, as more Jamaicans subscribe to foreign-based platforms for entertainment, cloud storage, software services, and connectivity, successive administrations have faced pressure to modernise the tax system to reflect the digital economy. Similar measures have been introduced in several other jurisdictions, where governments have sought to ensure that foreign digital providers contribute tax on services consumed within their borders.

While acknowledging that the issue of taxing digital services is not unique to Jamaica, Brown said several operational and policy questions remain unanswered. He pointed specifically to concerns surrounding enforcement and the potential impact on exporters of digital services.

“As it relates specifically to digital services, many issues arise in relation to the imposition of this proposed tax which require clarification, including the modalities for collecting the tax and how exporters of digital services will be impacted,” he told the Observer.

Taxing overseas digital providers often requires either direct registration by the foreign company or collection through local intermediaries such as credit card companies or telecommunications providers. The Government has not yet detailed which mechanism it intends to use, nor how compliance will be monitored.

Beyond the technical design of the measure, Brown warned that the broader package of new taxation proposals announced in the 2026/27 budget could compound existing financial pressures on households.

“However, we must state clearly that we are deeply concerned, overall, about the cumulative burden these new taxation measures are likely to place on ordinary Jamaicans. There is a real risk that the impact will fall disproportionately on the poor, the working class, and an already stretched middle class that has been steadily pulverised and pushed to the margins by successive government policies, rising costs and increased taxation,” he said.

The Opposition spokesperson also argued that any additional levy on widely used digital services could have ripple effects, particularly at a time when many Jamaicans rely on Internet-based platforms not only for entertainment, but also for education, business, and communication.

He added that the timing of the proposal must be carefully considered against the economic realities facing the country.

“Many Jamaicans are still struggling to recover from recent economic shocks and climate-related disruptions, and any further pressure on household consumption and the productive sector must be approached with extreme caution,” he said.

The Government has positioned the measure as an effort to broaden the tax base and bring foreign digital services into alignment with locally supplied services that are already subject to GCT. Advocates of such reforms argue that without these adjustments, domestic providers operate at a disadvantage while the State loses potential revenue in an increasingly digital economy.

However, critics caution that the practical effect may be higher subscription fees for consumers as companies pass on the additional tax cost.

The Opposition has indicated that it will continue reviewing the proposal before outlining a definitive stance, but Brown signalled that clarity and safeguards will be central to their evaluation.

BROWN… we must state clearly that we are deeply concerned, overall, about the cumulative burden these new taxation measures are likely to place on ordinary Jamaicans