Golding to review tax package following protests

KINGSTON, Jamaica: Prime Minister Bruce Golding, whose government is facing criticism and pressure from citizens and the opposition People’s National Party (PNP) for its J$21.8 billion (US$246 million) tax package, could pull back some of the measures announced last week.

In a statement issued last weekend, Golding said he had “heard the cry and the appeal of the Jamaican people” and would review the tax measures revealed in Parliament last Thursday. The government had insisted that they were needed as the country prepares to enter a US$1.3 billion agreement with the International Monetary Fund (IMF).

“It is my intention to re-examine the existing composition of the tax package in order to determine if there are suitable alternatives to finding the $21 billion of revenue required to support the program negotiated with the IMF while, at the same time, reducing its harsh impact on society, especially the poor and vulnerable during these very difficult times,” Golding said.

However, Golding emphasized that the choices were extremely limited. He said Jamaica’s current revenues cannot meet required expenditures and the nation cannot borrow its way into an even worse crisis.

“Nor can we shut down vital services that the government has to provide for the country. Discussions with the financial sector toward a substantial reduction in the cost of servicing our debt are well advanced and should be concluded shortly. We remain resolute in our determination to do what is best for Jamaica in these difficult times while being sensitive to the difficulties which our people are already experiencing,” said Golding.

His announcement came hours after the PNP called on supporters to take part in street protests against the tax measures, which are scheduled to take effect January 1, 2010.

Under the measures announced by Finance Minister Audley Shaw in Parliament last week, the General Consumption Tax (GCT) will move from 16.5 per cent to 17.5 per cent; and the number of items exempted from the tax will be reduced. As a result, some food items, including bread, canned sardines, mackerel, fresh fruit and vegetables, meat, poultry, fish and corned beef, will attract the tax for the first time.

In addition, the GCT will be paid on electricity consumption above 200 kilowatt hours per month, adjustments will be made to the Special Consumption Tax on fuel, and tax on cigarettes will increase from J$8,500 (US$95) to J$10,500 (US$118) per thousand sticks.

“Are you ready to demand that the government roll back the unjust and inequitable taxes? Then go forth, comrades, with discipline,” said PNP President Portia Simpson Miller during an emergency meeting of the party’s National Executive Council.

Simpson Miller told party faithful to await the instructions for the various protests across the country.

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