Gov’t Will Not Tax Basic Foods – Dr. Phillips

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, has assured Jamaicans that the Government will not be taxing basic food items.

The Minister made the declaration as he closed the 2013/14 Budget Debate on Wednesday, May 1, in the House of Representatives.

He was responding to comments by the Opposition for the removal of all tax exemptions attributable to basic food items as part of the tax reform process.

“This is not the policy position of the Government,” Dr. Phillips stated.

He noted that the move would cause undue and unnecessary hardship on the poorest segment of the population.

Dr. Phillips said also, that a significant segment of the working class, who would not necessarily qualify for benefits through the Programme for Advancement Through Health and Education (PATH), would also be impacted.

“A simple increase in PATH benefits would not alleviate the hardships caused and, in any event, this House agreed unanimously, I believe, when it considered the White Paper on Tax Reform, that any elimination or exception to basic food should be dependent on the identification of a set of triggers to be achieved before any such measure could be undertaken,” he stated.

Dr. Phillips stated that the Government is implementing a comprehensive tax programme, which goes beyond amending rates, to changes in policy, legislative measures, and institutional reform.

He informed that the policy reforms include widening the tax base for corporate and consumption taxes; the reduction and elimination of distortions in the system with regard to tax incentives and waivers; and lowering the rates of personal income and corporate taxes to competitive levels subject to improvement in revenue flows.

With regards to legislative measures, the Finance Minister said that an ambitious programme is already underway in relation to the treatment of charities, the establishment of Tax Administration Jamaica as a semi-autonomous revenue authority, and the debt write-off of tax arrears.

He informed that legislation in relation to the granting of access to third party information will come to Parliament later this year.

“It is an ambitious programme, and given the expressed commitments of the Opposition to tax reform, we are expecting their support,” he added.

Other reforms include: the conversion of Customs as an executive agency as at April 1, while a Board will be set up for Tax Administration Jamaica, and new operations system will be put in place to modernize the new operations.

“In addition, over the next month, an additional 120 auditors will be appointed to the enlarged Tax Payers Office to reduce and eliminate tax evasion activities,” he said.

The Finance Minister said the Government is committed to a new Omnibus Incentives Act, adding that a committee has been established with private and public sector representatives under the chairmanship of Dennis Morrison, who has been having dialogue with relevant and affected stakeholders.

By Chris Patterson, JIS Reporter