KINGSTON — Country Representative for the Inter American Development Bank (IDB), Ancile Brewster, says that the Government has a good chance of successfully reforming the tax system
“We think so, precisely because there is a general consensus that we have to fix it. With waivers, without waivers the growth hasn’t come, the stimulus hasn’t come and we are very interested now in modifying the system, in such a way that it better serves the purposes of economic growth,” Mr. Brewster said.
He was speaking at the Kingston and St. Andrew Parish Development Committee and the Trafalgar Council Town Hall meeting on the Tax Reform Green Paper, on Wednesday August 24 at the Petroleum Corporation of Jamaica (PCJ) Auditorium, New Kingston.
Mr. Brewster noted that, over the years, improvements to the tax system have been “essentially partial”, but the current effort will have a much more comprehensive approach.
“We are looking at all aspects of the tax system, albeit in phases, but that at the end of the day, we will have a system that promotes growth, that gives requisite inflows to the treasury, promotes equity and stimulates entrepreneurship and production,” Mr. Brewster added.
The Country Representative also argued that, if properly done, tax reform could help Jamaica in the areas of fiscal deficit and national debt.
“Jamaica is one of the highly indebted countries, it has quite a high debt ratio to gross domestic product but, with continuous emphasis on surpluses, this debt will eventual be erased,” he predicted.
Director General of the Planning Institute of Jamaica (PIOJ), Dr. Gladstone Hutchinson, commented that tax reform was a critical issue of the growth inducement strategy the PIOJ has been engaged in. He noted that the growth inducement strategy is based on removing impediments to growth, and removing nuisance taxes, among other things.
“I have been arguing that tax reform, though it has a very important treasury management component, it must also be about enhancing entrepreneurship, business development, protecting social equity and creating platforms for those things, if it is to be embraced,” Dr. Hutchinson said.
The Green Paper, tabled in May 2011, is aimed at ensuring that the tax system is simple, efficient, provides equity and fairness and stimulates economic growth while yielding adequate amounts of revenue.
Delivering on a promise that the process will be all-inclusive and comprehensive, the Government is calling on all stakeholders, inclusive of business and professional organizations, civic bodies, trade unions, academics, workers and the general public, to submit, in writing, their comments and suggestions on the Tax Reform Green Paper.
At the end of the consultations, the Government hopes the valuable feedback will result in a final policy position (White Paper) slated for implementation in 2012.
By Latonya Linton, JIS Reporter