Gov’t to Consolidate Statutory Deductions

The Government will, during the 2008/09 fiscal year, implement the consolidation of statutory deductions into one social security payment, as part of efforts to reform the country’s revenue collection system.
This announcement was made by Minister of Finance and Public Service, Audley Shaw, during his Budget presentation in the House of Representatives yesterday (April 10). “This is meant to be a part of the strategy of simplification that is an objective of tax reform. The Government re-emphasizes its commitment to comprehensive fiscal reform as a means to improve fiscal sustainability and create an environment conducive to economic growth by increasing competition while decreasing transaction costs,” Mr. Shaw explained. He added that the overriding principle that will guide the reform process is simplicity and equity in the imposition and collection of taxes.
The Finance Minister stressed that the overhaul of the tax system is long overdue, having last been reformed in 1986. He noted that in a 2008 Joint ‘Paying Taxes’ World Bank and PwC Report, Jamaica is listed among 10 (of 178) economies where it is most difficult to pay taxes due to the number of different tax types, payment dates and tax rates.
He further informed, that a technical team in the Ministry, led by Minister Without Portfolio, Senator Don Wehby, has been engaged in an extensive review of proposed tax reform measures, taking into account several benchmark studies that have been done by the Matalon Committee, a study by Professor Bahl of Georgia State University, and a Competitiveness Study sponsored by the Inter-American Development Bank (IDB).
Mr. Shaw noted that the IDB also recently sponsored the further consultancy of an international tax expert to work with Senator Wehby. “Senator Wehby and a local task force on Tax Reform will be making the final recommendations to Cabinet for implementation during this fiscal year,” he told the House.