SCT on Price of Petrol Yields $2.45 Billion

Revenue totalling $2.45 billion was generated from the Government’s imposition of an additional $7 Special Consumption Tax (SCT) on the price of petrol, for the period April to July.

Finance and Planning Minister, Dr. the Hon. Peter Phillips, made the disclosure during Tuesday’s (September 29) sitting of the House of Representatives, in response to questions posed by Opposition Spokesman on Finance, Audley Shaw.

The SCT, which was announced by Dr. Phillips during his 2015/16 Budget Debate presentation in the House, in March, is intended to provide additional resources for the administration’s establishment of the proposed Energy Stabilization and Energy Efficiency Enhancement Fund (ESEEEF).

This facility is designed to position the administration to undertake medium and long term projects, aimed at reducing Jamaica’s dependence on oil imports, and carry out hedging operations, as deemed necessary.

Hedging is an investment position use to reduce substantial losses that may be incurred by a person, organization, or country, in Jamaica’s case, where the focus is on implementing contingencies to cushion the nation against the impact of possible global oil increases.

In this regard, Dr. Phillips told the House that legal drafting of the necessary amendments to the General Consumption Tax (GCT) Act to facilitate the ESEEEF’s creation is currently being undertaken, following Cabinet’s approval of the facility in August.

“The establishment of such a fund requires legislative amendments to be made in order to provide for, among other things, sources of funding…that is to say, funding rules; use of funds (spending rules); governance arrangements; and reporting obligations,” the Minister outlined.

These arrangements, he further advised, will provide “clear guidelines” for transparency and accountability, and provide assurance that the funds “will be used in the manner intended.”

Dr. Phillips also indicated that a Ministry Paper outlining the rules, transparency and accountability arrangements will be tabled in the House of Representatives, shortly.

“In the meantime, a sub-account of the Consolidated Fund has been established to receive the proceeds of the tax,” noted.