FINANCE Minister Audley Shaw will ask Cabinet to approve an increase in property tax as part of plans to fund the cost of the second tranche of the income tax give-back promised to 252,000 taxpayers earning up to $1.5 million annually.
At the same time, Shaw ruled out any increase in General Consumption Tax (GCT) or a raid on the National Housing Trust (NHT) funds to pay for the income tax deal promised in the lead-up to the February 25, 2016 general election.
“Cabinet will have to take a look at property taxes, among other areas that I will be suggesting for the next budget,” the minister told the Jamaica Observer in an end-of-year interview looking back on his eight months since he retook the helm of the ministry.
The payment of the $1.5 million, which Shaw said his Jamaica Labour Party (JLP) was told could not be done, was phased over two budgets, with the first tranche costing $12 million paid in July this year, and the second to come in April 2017.
But the plan has drawn criticism from Jamaicans who said it was being nullified by increases in fuel tax, departure tax and cigarette sales to cover the cost.
“We must never underestimate the significance of putting back up to $18,000 monthly in the pockets of working people,“ Shaw said. “I am happy that we are in this position to carry out our promise. What I ask people to understand is that this is a give-and-take situation.
“Other governments have taken but not given back. We are taking but we are also giving back. We are actually taking a smaller amount from a larger amount of people, which is a good way to collect taxes, as it brings in those who were avoiding taxes.
“The multilaterals are happy with indirect taxation, which is what we are doing. So we collect taxes and we give back. It means that people have more choice in what they spend their money on. This is the direction we want to go, moving forward,” said Shaw.
The minister said it was working as many people, including teachers, firemen, policemen and the like had come up to him to say they were happy with the plan and that it was making a difference in their lives.
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