Dr. Phillips Outlines Measures to Raise $22.7 Billion for Budget

Finance and Planning Minister, Dr. the Hon. Peter Phillips, on Thursday, March 12, outlined measures, which are projected to raise additional revenue to fill a $22.7 billion gap in the Government’s $641.56 billion budget for fiscal year 2015/16.

Delivering the opening Budget Debate presentation in the House of Representatives, under the theme: ‘Strong Foundation for Growth and the Expansion of Opportunities’, Dr. Phillips said key among the measures are tax compliance efforts, targeting property and transfer tax, and withholding taxes on payments statutorily due.

Successful implementation of these, he indicated, is expected to yield $12.3 billion.

Dr. Phillips said it is proposed to raise the remaining $10.4 billion through a range of other measures.

These include: adjusting the cess on all categories of retailed petroleum products to reflect a $7 increase in the Special Consumption Tax (SCT), which is expected to generate $6.4 billion; as well as converting the current one per cent cess, paid by the state oil refinery, Petrojam, to the Petroleum Corporation of Jamaica (PCJ), to a SCT of $2 per litre on specified products, which is projected to yield another $1.8 billion.

Both measures, the Finance Minister pointed out, become effective on March 18, 2015.

Dr. Phillips also advised that an additional $807 million is projected from the proposed re-introduction of General Consumption Tax (GCT) on monthly electricity consumption amounting to over 350 kilowatt hours (KwH), which becomes effective on April 1, 2015.

Other measures include: an increase in the SCT on cigarettes from $10.50 to $12 per stick, effective March 13, 2015, which should generate $488 million, the proceeds of which will be directed to the National Health Fund (NHF); expanding application of the existing the 0.5 per cent environmental levy on imports, to include goods from CARICOM, effective April 1, 2015, which is projected to generate approximately $962 million.

The total central Government expenditure for 2015/16 will comprise: non-debt expenditure of $355.3b and public debt servicing of $310.2B.

Approximately $23.9 billion or four per cent of the gross budget will be financed by from user charges, fees, and grants from public bodies, while the net balance of $641.5b will be funded by revenues, loans, and external grants.