BROOKLYN, NY– The People’ National Party (PNP) says the government’s tax policy as outlined by Finance Minister Dr. Nigel Clarke in his recent Budget presentation, is worsening inequality in the country.
On Tuesday, in his contribution to the 2019/2020 Budget debate, the PNP’s spokesman on Finance, Mark Golding, accused the government of placing a heavy tax burden on Jamaicans.
In opening the Budget Debate last week, Clarke announced that the Government was “giving back” J$14 billion One Jamaica dollar=US$0.008 cents) in taxes.
But according to Golding, the government’s policy to move the burden of taxation more towards indirect taxation.
“This means the tax burden is carried by the people, including the poor and the struggling. And with the greater intake of taxes overall due to the success of the tax reforms, with collections ahead of inflation and ahead of growth, it means that more and more tax is being extracted from ordinary, less well-off Jamaicans.”
“All taxpayers deserve a break! The government must spread the benefit to all Jamaicans, not just a few. All Jamaicans want to taste a slice of delicious topsy turvy cake, not just the beneficiaries of corruption and poor governance.”
Golding said that while the government’s tax plan is an incentive to many, including housing developers and people seeking mortgages it left out the majority of Jamaicans.
He reasoned that the administration could have, for example, reduced the general consumption tax (GCT) rate from 16.5 percent, in order to benefit more people.
“The indirect taxes on consumption and fuel are a load on the backs of the majority of the people, while the more economically advantaged are privileged in carrying less and less of the load.”
Crumbs to poor people
The PNP’s spokesman on Finance went on to chastise the government for giving poor Jamaicans on welfare, mere crumbs under the Program of Advancement Through Health and Education (PATH).
Golding said while he welcomed the increased allocation to PATH beneficiaries when the money is broken down into real life terms, it’s not enough.
The Minister made much of the J$4 Billion increase in the budget for persons on PATH. This was touted as evidence that this Government is prioritizing the interest of the poorest and most vulnerable. But let us examine, in the absence of hype and back-slapping, what that increase really means for the over 340,000 PATH beneficiaries. It works out to $226 a week per beneficiary or $32 per day. It is a drop in the bucket and represents mere crumbs from the Minister’s table. It can’t even buy a patty. It can’t buy a bun and cheese.”
Foreign exchange market poses major challenges
Turning to the foreign exchange market, Golding said this is a major challenge as Jamaicans have had to grapple with instability in the foreign exchange market.
He noted that the instability is bad for business as it undermines confident decision- making, investment and growth.
In his presentation titled – No equity+Slow growth= Wrong Direction, Golding said several areas are in need of development, including the agricultural sector.
“We have a competitive advantage in several agricultural products. Our coffee, cocoa, ginger, and sea island cotton are rated among the best in the World. However, there has been a lack of focus and innovation in pushing these industries forward, and they are not given the priority they deserve.”
He also urged the government to develop a national plan to support the emerging medical marijuana industry.
On Thursday, opposition leader Dr. Peter Phillips will make his contribution to the debate and next week, Prime Minister Andrew Holness will speak.
The Finance Minister will close the budget debate on March 20.