JIS News

A Tax Reform Committee comprised of experts from the public and private sectors has been formed, which will review and analyze the various tax reform studies that have been done on Jamaica.
Minister without portfolio in the Ministry of Finance and the Public Service, Senator Don Wehby, made the announcement in his address at the Investment Seminar hosted by the Jamaica Money Market Brokers at the Terra Nova Hotel in Kingston on Tuesday (Nov. 27) on the topic: ‘The Paradigm Shift on Managing Jamaica’s Debt and Fiscal Accounts.’
Among the reports that the committee will analyze are: the recent Inter-American Development Bank (IADB) survey of Jamaica’s current tax revenue environment; the Matalon Committee recommendations; and the Private Sector Organization of Jamaica (PSOJ) position paper on tax reform.
Senator Wehby informed that the Committee members have been asked to include in their individual reports, recommendations for reforming Customs and improving tax administration.
The Committee is expected to submit its final joint report to Minister Wehby by December 1, which will be reviewed in consultation with the Prime Minister and the Cabinet, with the aim of rolling out a reform package.
According to Senator Wehby, the Government will embark on a comprehensive tax reform in 2008/09 to preserve the integrity of its tax revenues and boost compliance. “All recent tax reform studies highlight tax compliance as a major issue in Jamaica,” he stated.
Citing the findings of the IADB study, he said that “one per cent of corporations pay 71 per cent of corporate income tax collected; one per cent of registered entities account for 60 per cent of Pay-As-You-Earn (PAYE) employee tax deductions remitted; one per cent of businesses and individuals registered to collect General Consumption Tax (GCT) remit their collections; tax exemptions and incentives have eroded half of the tax base; and 40 per cent of business activity is unregistered and untaxed.”
“This speaks to a fundamental flaw with the current tax system,” he argued, noting that “over a decade has passed since the last major tax reform exercise was undertaken.”

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