BRAKES ON GAS TAX

Declaring that consumers need a break from soaring petrol prices, Opposition Leader Mark Golding recommended on Tuesday that the Government cap the ad valorem special consumption tax (SCT) on fuel at US$67.50 per barrel.

If his proposal is implemented, Golding said that oil prices above US$67.50 per barrel would not result in higher taxes on fuel. He is suggesting that the same principle be applied to liquefied natural gas.

Those were among a raft of proposals made by Golding in his contribution to the Budget Debate.

He has also clamoured for a reduction in the cost of clearing barrels with food and other essentials sent by Jamaicans overseas to relatives here.

“I propose that it be reduced by 50 per cent for the coming year, from $6,500 to $3,250,” the opposition leader said.

Turning to opportunities for young people studying at the tertiary level, Golding said that the next People’s National Party administration will abolish the requirement of finding a guarantor to access student loans.

Last year, Clarke announced that students accessing loans from the Students’ Loan Bureau (SLB) would only need one guarantor instead of the two that was a previous requirement.

Golding said a future government led by him would cap monthly payments at a reasonable percentage of borrowers’ actual income.

“We must ensure that student loan payments are manageable for young graduates. I am proposing a ‘Fresh Start’ programme where the SLB forgives say $7.5 billion in student accrued loan interest and penalties,” he said.

The ‘Fresh Start’, he said, would remove bad credit rating from students, giving them a chance to build a better future.

The price of fuel has been top of mind for business operators and average Jamaicans, who have been hit by double-digit percentage increases across the board for 87– and 90-octane, as well as automotive diesel.

Spiralling pump prices are expected to worsen amid the three-week-old military conflict between Russia and Ukraine and against the backdrop of months-long inflationary pressure that has driven up the input costs of food and other commodities.

Golding argued that capping the price of fuel would take some pressure off consumers, motorists, and transport operators.

“Consumers need a break on their electricity bills,” Golding said in a spirited contribution.

“To us, it would be a meaningful response to the devastating increases in electricity prices and transport costs due to massive increase in the price of oil,” the opposition leader added.

He reasoned that since the Government has not budgeted for a windfall in taxes on oil prices above US$67.50, capping the tax at that price would not adversely affect the Budget.

Since Russia declared war on Ukraine, oil prices have skyrocketed to more than US$130 per barrel, but that hike has eased from a week ago. On Tuesday, the price of oil sank below US$100 a barrel.

Approximately 40 per cent of the price of gas in Jamaica consists of various taxes.

Last week, Opposition Spokesman on Finance Julian Robinson called for the hedge tax on fuel to be returned to motorists.

Golding said that the hedge was imposed to buy price insurance to protect the public from high gas prices.

While acknowledging the pressure on consumers owing to high fuel prices, financial analyst Dennis Chung argued that with the increasing oil prices on the world market, the Government should set aside more than the $2 billion Clarke Finance Minister Dr Nigel Clarke earmarked to assist the more vulnerable segment of the population.

He also suggested that a windfall from taxes as a result of higher oil prices should be used to significantly improve the public transportation system in Jamaica.

Chung said that this would have the effect of reducing the reliance on private transportation.

“Right now, I am sitting in traffic. What we need is a good public transportation system,” he said.

The financial analyst said that an efficient public transportation system would not only reduce the country’s dependence on oil but also increase the productive time for the labour force.

Chung said three years ago when petrol price was lower, he estimated that Jamaicans were spending about $200 billion of productive time on the road.

“I am not hearing any suggestions about resolving those long-term issues. All the measures I am hearing with respect to that are short-term, but what happens to us in the medium term?” he questioned.

The administration is also being urged to increase the tax-free value from US$50 to US$150 on imported personal items.

Golding said that with the explosion of the Internet and access to online shopping, consumers are able to buy personal items from overseas and have them shipped to Jamaica.

According to the opposition leader, duties and other taxes on goods valued at over US$50 are burdensome on consumers who shop in this way to achieve greater value.

editorial@gleanerjm.com