(Jamaica Gleaner) The Pri-vate Sector Working Group (PSWG) on tax reform has revealed 145 proposals to raise some J$7.3 billion in new taxes for the Govern-ment, which would widen the General Consumption Tax (GCT) base, but also radically reduce the tax burden for large corporations and the poor.
The PSWG hopes some of these proposals will be accepted by the Government for implementation at the start of the new fiscal year on April 1.
These measures aim to catch tax dodgers while placing the island on a path to equity and growth, reasoned the PSWG, which consists of the Private Sector Organisa-tion of Jamaica (PSOJ), Jamaica Manufacturers’ Asso-ciation, Jamaica Exporters’ Association, Jamaica Cham-ber of Commerce, and the Jamaica Bankers’ Associa-tion, among others.
“This is designed for Jamaica to have a competitive general tax system that is equitable, that provides a platform for development and economic growth. It is characterised by a greater level of simplicity and also by competitive rates of tax. Also, one that is administrated in an efficient manner,” stated PSOJ President Joseph M. Matalon in giving the main address during a press conference at The Wyndham hotel in New Kingston.
The main proposals are a series of give-and-take measures expected to gross J$9.79 billion and net J$7.29 billion.
Matalon stated that of the 60,000 registered businesses in the island only five per cent pay taxes.
“It is a situation that is unsustainable,” he stated about Jamaica, which consistently ranks as one of the hardest places on earth to pay taxes.
The group sought to defend the proposed reduction of corporate income tax, arguing that it would foster investment and jobs. Additionally, Matalon argued that proposed taxation on dividends would negate some of the benefit.
“There is a large body of international literature which suggests that higher growth rates are associated with low corporate tax rates,” stated Matalon.
Last year, the PSWG measures were met with opposition from Jamaica Stock Exchange and Jamaica Hotel and Tourism Association because of waiver removal proposals.
“We are still in discussion with those groups,” stated Senator Imani Duncan-Price, part of the PSWG in the question and answer segment.
In April 2011, the Govern-ment published a Green Paper on tax reform aimed at simplifying the tax structure while expanding the tax base. A parliamentary Committee on Tax Reform was subsequently set up to consider submissions made by members of the public. The consultations will inform the drafting of a White Policy Paper on taxes, which will form the basis of new tax laws. Late last year, discussions on the Green Paper for tax reform continued with sector interests arguing for the protection of certain industries.