No new taxes this year! – Shaw
Finance Minister Audley Shaw
Speaking at the Mayberry Investment Forum held at the Knutsford Court hotel last night, the Minister of Finance Audley Shaw declared there would be no new taxes this year.
”With this current trajectory, it is not the government’s plan to introduce a tax package in the upcoming budget,” Minister Shaw announced to the audience.
He was responding to a question posed by Mayberry’s CEO Gary Peart concerning the dramatic fall in the debt to GDP ratio.
Earlier in his presentation, Shaw said that by the end of March of this year the debt to GDP ratio would have fallen to 107% from a high of 150%.
Peart point out that the IMF had ascribed a very high Primary Surplus to Jamaica in an effort to bring down the debt to GDP ratio as soon as possible.
“ But one of the consequences of this has been the impact on growth and we all know that you are all about growth. So the question is for 2018/19, is there an opportunity to get relief from the IMF whether it be by a quarter or half point on the Primary Surplus so that you could be the first finance minister in about 15 years to get up in Parliament and announce ‘no new taxes this year’.
Peart continued …
“Last year we did very well. The growth numbers have been challenging because we have to hit the Primary Surplus.
“ But the numbers suggest that we are being over taxed and every Jamaican is waiting to hear from their Minister of Finance that there will be no new taxes.”
Shaw took the opportunity to point out that Jamaica had gotten a relaxation on the Primary Surplus from 7.5% to 7%. He added that when the time is appropriate, the government will seek to get it down to 6.5% then 6% then even lower.
“The more relaxation you have from the Primary Surplus the more money you will have for capital expenditure. Now we do have a challenge in that we need to ramp up the rate of our capital expenditure on a more efficient basis.
“For this year we have targeted $16 billion for major road works but the capacity and the pace of the implementation has forced us to cut that number by $4 billion down to $12 billion.”
The Minister of Finance explained it is one thing to appropriate a certain amount for capital expenditure but the government needs to have the infrastructure, the people, the planning and the approval processes in place. He went on to say that everything has to be expedited so that larger capital expenditure can be facilitated.
“You remind me of a politician who has just retired who once said, ‘Shaw don’t draw mi tongue!’
“ What I can say with some considerable certainty is that we are going to continue to grow the economy. The finances and revenues are doing fairly well. As of the end of December, I am $13 billion ahead of the revenue target.
Shaw announced that the government will be concentrating on non-tax initiatives but that everyone will have to pay their fair share. And if everyone does so, the cost of duties can actually be reduced.
“ With this current trajectory it is not the government’s plan to introduce a tax
package in the upcoming budget, “ said the Minister of Finance.