Byles: Delay tax threshold to fight crime
Published:Thursday | October 13, 2016 | 12:00 AMMcPherse Thompson
Co-chairman of the Economic Programme Oversight Committee (EPOC), Richard Byles, is suggesting that about half of the $16 billion the Government expects to raise to finance the second phase of the tax threshold plan should be routed to capital expenditure for the security forces.
Byles, who noted that the Economic Growth Council has cited crime as one of, if not the single most important impediment to growth, was basically recommending a tripling of the capital budget for the national security ministry.
To get there, he suggested that the Government delay taking the tax-free threshold to $1.5 million - it's now $1 million - to free up resources to fight crime.
The Jamaican Government's overall capital expenditures are budgeted at $43 billion for this fiscal year, of which the national security ministry gets $3.6 billion.
Byles' proposal would push the latter's capital budget to just under $12 billion.
"Now, I know that the business of crime is a complex issue and it has many moving parts. It has to do with management ... it has to do with information, but at the base of every effort is resources," said the EPOC co-chair. "We have scarce resources and we are going to raise $16 billion next year to increase the tax threshold. Is that the best way to spend that scarce resource, or should we be putting some of it - half of it - to fighting crime?" he said at the latest EPOC press briefing and release of its 41st communique.
"Let's provide the resources that lay the foundation to really attack the issue of crime and delay or stretch out the business of raising the tax threshold," he said. "It seems to me that both the Opposition and the Government are of one view that we should remove crime as a partisan issue. Well, let's show that we believe that. Let the Opposition show that they believe that. Let the Government show they believe that by devoting some of those resources to fighting crime."
Byles said he made a similar appeal last year about the first tranche of the income tax threshold, when the Government imposed a $13-billion tax package to increase it from $592,000 to just over $1 million.
"Maybe that was too early, but surely we can give consideration to that," he said.
"When we are shooting children, I mean, and burning them up, we have to call a halt to this madness, and we have got to put all the resources we have to fight this scary evil," said Byles, referring to the murder of five people, including three children in March Pen, Spanish Town, St Catherine, last Sunday. Their houses were also set on fire.
"To get to $16 billion, let's say there are some ways we can cut and save somewhere. But you are going to have to raise taxes, in my opinion, and I don't see how you get to $16 billion without doing that," said the Sagicor president and CEO.
"I am not saying we should forego the taxes. I am saying, as a country, yes, let's raise that $16 billion, but let's not spend it on the threshold alone. Can we spend some of it, half of it, whatever it takes to really start to make a serious assault on crime."
Byles reported that Jamaica produced a primary surplus of $41.7 billion for the fiscal year to August, compared to the budgeted $17.5 billion.
The net international reserves stood at US$2.46 billion at the end of September, comfortably in excess of the International Monetary Fund target of US$1.85 billion.
Revenue collection of $190.4 billion for the first five months of fiscal year 2016-17 was well above the target of $177.5 billion and was also significantly above the same period last year.
He said that tax collections of $177.7 billion continue to outperform budget. The tax categories with the best performances were general consumption tax, $2.9 billion above the target; Pay-As-You-Earn, $1.9 billion above budget; and stamp duty, $1 billion over the Government's target. Travel tax, which was $0.9 billion below budget, was the main underperformer.
Expenditures from April to August were $13.8 billion below budget. Some $6.8 billion of those savings was on the recurrent side of the budget.
Capital expenditure was $7 billion or 36 per cent below target, the principal reason being the late approval of the 2016-17 Budget.