Elements of Tax Reform to be incorporated in this Year’s Budget

Elements of the Tax and Tax Administration Reform package will be incorporated in this year’s budget and will be implemented over a three-year period.

This was announced by Finance and Planning Minister, Hon. Dr. Peter Phillips, during his opening presentation of the 2012/13 Budget Debate in the House of Representatives on  May 24.

The new measures will include: reducing distortions through drastic reductions in tax incentives and waivers; widening the tax base for both corporate income tax and consumption taxes; legislative and administrative amendments to increase compliance; and lowering of rates, including personal income tax.

“The tax reform package being contemplated is to be implemented over a three-year period and is intended to achieve the following objectives: meet the revenue demands of the budget; ensure greater equity and simplicity; and increase compliance,” he stated.

Giving an update of the process which will lead to the policy adjustment, the Finance Minister reminded the House that tax and pension reforms are among “key structural reforms” earmarked for urgent consideration.

He advised that the Committee on Taxation which considered the Green Paper on Tax Reform has now completed its deliberations and a Draft Report on the findings has been prepared for final consideration by the Committee and ultimately by the whole House.

The Minister further informed that the Report of the Committee will help to form the basis for a White Paper to be presented to Parliament before the House takes its Summer recess.

Expressing his appreciation to the “more than 20 organisations and individuals who took the trouble to make presentations to the Committee”, Dr. Phillips made special mention of the Civil Society Coalition, the Joint Trade Union Research and Development Centre and the Private Sector Working Group.

He singled out the investment of time, effort and resources of the Private Sector Working Group for special commendation.

“The building of national consensus on matters of such national importance is critical to national development. In this regard the example set particularly by the Private Sector Working Group is commendable and worthy of emulation. Their investment of time, effort and resources to engage in extensive discussions among themselves, and in the wider society indicates a level of patriotic commitment and an example of civic duty which deserves the recognition of the Parliament,” the Minister said

“I do not recall a time when so much effort has been made to educate the public to a better understanding of the issues around tax reform. It is a moment that we must seize to mobilise national goodwill as we embark on a programme to build a new covenant,” the Minister said.

By Allan Brooks, JIS Senior Reporter