Government gives fuel tax thumbs down
Published:Sunday | January 19, 2014 | 12:00 AM
Gary Spaulding, Senior Gleaner Writer
While maintaining that the Government is not banking on the imposition of new taxes next fiscal year, Finance Minister Dr Peter Phillips has acknowledged that that option will remain on the table.
Phillips' comments come just over a week after he told The Gleaner the Government did not have plans for taxation and was instead focusing on general tax reform.
Now, with two months to go before the close of the 2013-2014 fiscal year, the finance minister has signalled he will be ensuring that Parliament's Public Administration and Appropriations Committee (PAAC) commences, this week, its review of the Government's fiscal policy paper tabled less than a month ago.
"We are going to have the Parliament look at some of the options after the report on the fiscal policy paper is considered by the PAAC," Phillips told The Sunday Gleaner.
The 2013-2014 Fiscal Policy Paper Interim Report was tabled on December 17, 2013. This is in keeping with the Financial Administration and Audit Amendment Act 2010.
The law stipulates that: "Upon presentation of the Annual Estimates of Revenue and Expenditure, the (finance) minister shall lay before both House of Parliament a fiscal paper setting out a macroeconomic framework; and a fiscal responsibility statement; a fiscal management strategy."
Proposed reforms of the tax structure, as well as public financial management; public-sector and growth-enhancing reform have dominated the interim report of the fiscal policy paper.
"It's going to be done this week and we are going to be setting up the committee on tax measures and have that consideration done," said Phillips. "I will be talking more to the committee on tax measures."
preliminary look
Fresh from the first Cabinet retreat for 2014 that took a preliminary look at the figures, Phillips moved to allay concerns mounting in the public domain over his recent statements that appeared to contrast with those of Prime Minister Portia Simpson Miller, about the likelihood of taxes in the 2014-2015 financial year.
Phillips stressed that when he indicated that the Government was not considering taxation plans, he was making specific reference to a proposed tax on fuel.
"The critical component that needs to be made clear is that after the study on (any) new tax on gas, we are definitely not contemplating anything to do with gas," he said.
"We were looking at the study surrounding the simple issue of different types of collection mechanisms, including special consumption tax, which currently obtains," said Phillips.
The finance minister noted that the prospect of imposing general consumption tax on fuel was also examined.
"This would benefit producers in that it could be done against their own payments, but which would have the disadvantage, in that it is more difficult to collect, said Phillips.
"So we were definitely not considering that," he added. "We may not have to do any (impose additional taxes), but we have not yet looked at the numbers."
Eyebrows were raised last Thursday when Simpson Miller said she was not in a position to say that no additional taxes would be imposed on Jamaicans.
reprieve from new taxes
The prime minister's comment came after a pronouncement by Bishop Dr Delford Davis at the National Leadership Prayer Breakfast that Jamaicans should be given a reprieve from the burden of new taxes.
Phillips, while speaking with The Sunday Gleaner this past week, reiterated that the main preoccupation at this time is the efforts towards tax reform. "This is where we are concentrating our efforts and broadening the base generally and making it easier to administer," he stressed.
At the same time, Phillips remained emphatic that another critical component in the equation is the maintenance of primary surplus targets, as well as overall public sector deficit targets.
"That is our priority at this point in time, and if there is a shortfall in the projection, then we either have to raise revenues or cut our expenditures, and that is a judgement that we will have to make when those projections are in," he stressed.
Phillips said he was unable to make a definitive statement on new taxes, as the figures are not yet in.
"We don't have these final projections yet, but when we have them we will have to take a close look, in the course of the next few weeks."