Government to Implement Measures to Increase Revenues

Prime Minister, Bruce Golding has said that his administration hopes to roll out a new tax system in time for the start of the 2008/09 financial year, as increased revenues are critical to reducing the country’s debt to Gross Domestic Product (GDP) ratio, which now stands at some 130 per cent.
“In order to reduce the debt, and our heavy reliance on additional borrowing, we are going to have to secure more revenues. We believe that the tax system that now exists is itself not assisting in revenue enhancement. We have had recommendations before us for a major reform of the tax system, most of which have not been implemented. It is something that we are looking at seriously,” Mr. Golding told members of the Diplomatic and Consular Corp at a meeting at Jamaica House on (Oct.3). Mr. Golding was responding to a query put forward during the meeting, by British High Commissioner to Jamaica, Jeremy Creswell as to what were some of the initial steps that the Government intends to take in order to tackle the country’s debt issue.
The Prime Minister pointed to job creating investments as another critical area to be addressed. “Not only do we need the jobs to deal with the surplus of unutilized labour that we have and because they represent an important means of tackling social problems like crime, the heavy dependence that exists on social programmes, but significantly, the fastest way to increase our revenues is to increase jobs, because two thirds of our revenues are derived either from wage deductions or from consumption tax, and therefore the more job you create and the more consumption that takes place, the more revenues flow,” he outlined.
Mr. Golding assured that the Government was committed to “cauterizing” the debt situation, and wants to get to the stage where debt ceilings will be set for the economy.
“We want to commit ourselves to a phased programme of debt reduction, and we are targeting ultimately to get that debt down to 95 per cent of GDP. Ideally, we would like to see a debt that is no more than 60 per cent of GDP, because you will always need to borrow money in order to sustain a programme of development,” he said. Prime Minister Golding called on the diplomatic corp to extend whatever assistance it could, toward investments. “We need all the help that we can get, but the real help that is going to make a long-lasting difference is the extent to which you can help us to get some investors into Jamaica, to identify trade opportunities that can expand local businesses,” he said.