Emphasis on Compliance – Finance Minister

The Government requires $8.5 billion in additional revenues to fill a gap in the 2015/16 Estimates of Expenditure of $641.6 billion, tabled in the House of Representatives on Thursday (February 19) by Finance and Planning Minister, Dr. the Hon. Peter Phillips.

Speaking at a media briefing at the Ministry, following the tabling of the Estimates and Revenues, Dr. Phillips said “the bulk of our efforts this year is on…compliance” to raise the additional sum.

Citing an example, Dr. Phillips indicated that Cabinet has approved, and will shortly introduce into Parliament, new Transfer Pricing Rules, which will govern transfer pricing transactions within companies that have local and overseas representation.

This, he explained, is to ensure that the actual prices charged for these “intra-company transfers” reflect “realistic” pricing, “comparable to what would have taken place between unconnected parties.”

“We will (also) be utilizing withholding provisions in relation to interest earnings and other transactions between parties,” he further stated, adding that “more…will be said on this when we actually begin the Budget Debate.”

The Finance Minister reiterated the administration’s long-term taxation commitment to “broaden the tax base and lower the rates,” pointing out that several strategies to this end have been undertaken over the past three years.

These measures, he reminded, include: lowering the General Consumption Tax (GCT) rate and the corporate taxation rate, underscoring that “we continue to have this as a fundamental objective of the Government.”

“We can only lower the rates, however, to the extent that we have available resources, and to the extent that we are clearing off the overhang of debt. Because our first obligation, not only in accordance with the Constitution of the country, but in accordance with good prudent fiscal management, is to reduce the debt overhang,” Dr. Phillips emphasized.

Thursday’s simultaneous tabling of the Estimates of Expenditure and Revenues in Parliament was a first in Jamaica’s parliamentary history.