Increased tax on Jamaica rum will affect tourism sector — Shaw

(Jamaica Observer) KINGSTON, Jamaica — Opposition Spokesman on Finance and Planning, Audley Shaw, says that the increase in the special consumption tax (SCT) on alcoholic beverages will work against the competitiveness of Jamaica’s tourism industry, which will be hard hit from the taxes.

“We must bear in mind that the tourism industry in Jamaica, as it is with so many destinations, is highly competitive, and this sharp increase in the cost of alcoholic beverages to the trade will drive a further blow to the industry’s ability to be competitive,” Shaw told the House of Representatives Tuesday, as he spoke in the 2014/15 budget debate.

“One company alone will see a crushing J$2 million hit on its ability to remain competitive. This is serious,” the opposition spokesman added.

The proposed tax on alcohol moves the SCT on alcoholic beverages from J$700 per litre to J$1,120 per litre. Specifically, the rate for White Overproof will move from J$960 per litre of pure alcohol to J$1,120 per litre of pure alcohol.

Shaw noted that, as minister of finance, he had exempted white rum from the regime introduced in 2010, which amended the taxation of alcoholic beverages from an ad valorem rate of 30 per cent to a specific rate per litre of pure alcohol.

“I exempted white rum from this regime to protect the local white rum industry,” Shaw noted, pointing out that in 2012 the current government amended that regime to provide for white rum to be taxed at J$960 per litre of pure alcohol.

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