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Minister of Finance and the Public Service, Hon. Audley Shaw, today (Wednesday, May 6) announced a reversal of Government’s decision to impose General Consumption Tax (GCT) on imported printed material, salt, rolled oats, syrup, fish soup, cock soup, noodle soups, motor spirit and lubricating oils for commercial fishing.
The reversals will cost the Government $2 billion in revenues, but the hole in its Budget will be plugged by an increase in the Special Consumption Tax (SCT) on cigarettes, as well as a restructured SCT on alcoholic beverages, except white rum.
Mr. Shaw explained that, although the GCT on printed matter is being removed, it will remain on imported newspapers.
The Minister said that GCT on computers will also remain, but that the Government intends to honour its commitment to grant waivers for the acquisition of computers by approved educational institutions.
Mr. Shaw made the disclosures, which were in response to public concerns, as he closed the 2009/10 Budget Debate in the House of Representatives, Gordon House.
He said that SCT on cigarettes will be increased from $6,000 per 1,000 sticks, to $8,500 per 1,000 sticks, effective May 11. The estimated revenue yield will be $1.8 billion, but 20 per cent of this amount will be remitted to the National Health Fund (NHF), which provides assistance to persons purchasing specific prescription drugs used in the treatment and management of designated chronic illnesses, leaving approximately $1.47 billion for the Budget.
A single rate of 25 per cent SCT will be imposed on beer and spirits, except white overproof rum, which will remain at 30 per cent. The flat rate of the Jamaican equivalent of US$0.40 per litre on wines, cordials and liqueurs will remain. The estimated yield from this measure is $530 million, and the effective date is also May 11, 2009.
The new single rate will replace the current SCT on alcoholic beverages which stands at 16-21 per cent on beer and 24-30 per cent on spirits, with white rum being the highest at 30 per cent. The new measures will yield approximately $2 billion in total tax revenues.
In his opening budget presentation on Thursday (April 23), Mr. Shaw had announced that items such as fish, cock and noodle soups in aluminum sachets, syrup, motor, spirit, lubricating oil for commercial fishing, live birds, rolled oats and salt would have become subjected to GCT.
The total tax package for 200/2010 is expected to yield $18.1 billion.