Sat | Feb 22, 2020

Haughton slams Phillips’ GCT rate cut proposal - Says call was ploy to ‘bait’ Gov’t

Published:Saturday | December 7, 2019 | 12:32 AMNickoy Wilson/Gleaner Writer
This painting was done by Oneike Barnett, as a part of the Paint for Peace initiative held recently at the Sam Sharpe Square in Montego Bay, 
St James. It was taken to the Upper House by Senator André Haughton as part of his presentation.
This painting was done by Oneike Barnett, as a part of the Paint for Peace initiative held recently at the Sam Sharpe Square in Montego Bay, St James. It was taken to the Upper House by Senator André Haughton as part of his presentation.

Senator Dr André Haughton has described as “bait” a recommendation by Opposition Leader Dr Peter Phillips to reduce general consumption tax (GCT) by two percentage points to alleviate the economic burden on Jamaicans.

He argued yesterday that the proposal was unworkable and would have a negative cumulative effect across the board.

“There has been many talks and our party leader made some hints and tossed out a bait about reducing GCT by two per cent and I heard Senator Sinclair as well as Audley Shaw talking about ‘we are going to take this into consideration’ without breaking down the numbers. Mr President instead of break down, let me break up the numbers,” said Haughton, who is a senator for the Opposition People’s National Party.

“If we are supposed to reduce GCT by two percentage points, moving from 16.5 to 14. 5 per cent, it will cost the country about $25 billion to $26 billion, assuming that every year we take $200 billion from GCT. Now this two per cent is going to cost the country $26 billion. That is the average cost,” he added.

Haughton, an economist and university lecturer, was making his contribution to the State of the Nation debate in the Senate yesterday.

In November, People’s National Party (PNP) President Dr Peter Phillips, while addressing a meeting of the party’s National Executive Council called for a two percentage-point reduction in GCT to provide relief for the country.

Haughton, however, said that a cut in GCT would cost the country more than it would benefit the average Jamaican.

“What is the benefit of the average consumer? I mean, if you buy something for $100, you pay $16.50 in GCT, you’re going to save $2. You buy something for $1,000, you might save $20. You buy something for $10,000, you are going to save $200. Then you going to buy something for $100,000, you will save 2,000.

“Now, is this saving as significant enough to each Jamaican for us to sacrifice $26 billion to achieve? Is it? Is it? We have to think more carefully about what our objectives are,” he said, following an eruption from government senators, who said that it was Phillips who proposed the tax cut.

In response, Haughton said, “We always dash them bait, man. Fishes will always bite bait.”

nickoy.wilson@gleanerjm.com