User Fees Are Not Taxes – Buchanan

Water and Housing Minister, Donald Buchanan has sought to clarify the perception that user fees are taxes.
“User fees cannot be considered to be taxes. There is an important distinction between the two,” he pointed out.
The Minister explained that taxes are applied across the board and go directly into the Consolidated Fund, while user fees benefit persons directly, as payment is made only when the service is required.
Speaking at a JIS Think Tank today (April 21), the Minister stressed that users of these services were not paying for them, but were in fact making a contribution, adding that no one would be denied access if they could not afford to pay.
He explained that mechanisms were in place for persons of little or no means to qualify for benefits from public services, such as health and education. “I implore all Jamaicans to familiarise themselves with the processes and methods by which you access these benefits,” Mr. Buchanan added.
The Minister pointed out that user fees were not unique to Jamaica, observing that various countries and successive governments in Jamaica have used these fees to recover a portion of the service delivery costs. “There is no situation where the recovery cost from user fees exceeds 10 per cent of the cost of such services,” he noted.
He explained that the practice of charging user fees allowed public organisations to have a direct cash income, which enabled them to respond to felt needs and to ensure effectiveness and efficiency in the provision of the service.
Mr. Buchanan pointed out that over the past five years, no adjustment to fees for health service had taken place, while noting the significant developments which had occurred within that sector. “The health service has had expenditure of some $6.2 billion over the last 10 years to refurbish hospitals, effect new construction and purchase equipment under the Health Sector Rationalisation Programme,” the Minister said.
He noted that several United Nations reports on social achievements across the world, “have consistently indicated that Jamaica has one of the finest records in the world, in terms of the delivery of health services and the cost efficiency and effectiveness of those services”.
The Minister said that the attention being given to early childhood education would impact positively on the quality of life for future generations, and therefore persons should make a contribution to the provision of social services where possible.
Adjustment to user fees for government services was announced at a post budget press briefing by Finance and Planning Minister, Dr. Omar Davies. No indication was given as to the level of such adjustments.
However, various ministries and agencies of government are currently in the process of preparing proposals on the new costs for submission to Cabinet.