No new taxes, please - Richard Byles begs for compliance focus in new Budget
Published:Tuesday | February 17, 2015 | 2:28 PMDaraine Luton
For the first time in the modern history of Jamaica, the Estimates of Revenue is to be tabled along with the Estimates of Expenditure.
This will be done in the House of Representatives today when Finance Minister Dr Peter Phillips lays the documents in Parliament, and Richard Byles, co-chairman of Jamaica's Economic Programme Oversight Committee (EPOC), is hoping that no new taxes will be in the 2015-16 Budget package.
"I expect the expenditure side to be tightly held, and I am hoping that there are not any new taxes for this year. What I am hoping to see, really, is that the compliance with current tax regime be stepped up so that revenue from the current taxes be more sufficient than they were in the past," Byles said.
Parliament last year approved the spending of $540.1 billion this fiscal year, which was later lowered to $539.3 billion. Phillips has said the Government was expecting to raise $421.2 billion to go towards Budget financing. He said loans of $110.9 million, as well as the utilisation of $1.4 billon, which represents balances in the banking system, and $6.7 billion in new revenue measures, would finance the Budget.
Up to press time yesterday, it was unclear how the new taxes imposed last year had performed. However, based on information published by the Ministry of Finance, revenues and grants were underperforming by $10.15 billion at the end of December. The target was set at $297.05 billion, but only $286.90 billion was collected.
Jamaica, under the economic programme administered by the International Monetary Fund (IMF), must maintain a primary surplus of 7.5 per cent while at the same time achieve a fiscal surplus to ensure its revenues covers all recurrent expenditure, including interest costs.
"The Budget this year is expected to be tough, and remember we have not fulfilled this current Budget as yet. We still have this very tough last quarter to March. But I expected the budget for 2015-16 to produce the same 7.5 per cent primary surplus that it did the previous year," Byles told The Gleaner.
When Phillips turns up in Gordon House for today's session of Parliament, he will be tabling the Estimates of Expenditure, the Estimates of Revenue, the Debt Management Strategy, and the Economic Policy Paper. The tabling of the revenue projection, Byles said, is a positive development.
"This gives the public and the members of parliament a lot more to think about, rather than just looking at the expenditure side alone and waiting to hear about the revenue," he said.
Meanwhile, asked if there is any place for the austerity versus more spending debate, Byles said absolutely not. He argued that with a debt-to-GDP ratio of about 132 per cent, "I don't think there can be any debate about it."
"We have some tough years that we have to endure. Hopefully, as the years go by and we hit our target, that primary surplus can be reduced and we can spend more on capital infrastructure and on operation issues, but we have to bite the bullet and just continue with this progamme and meet the targets," Byles said.