Minister of Finance and the Public Service, Hon. Audley Shaw, has stated that the Government does not plan to introduce any new tax over the next two years.
“It is not my intention over the medium term, and certainly during the term of the International Monetary Fund (IMF) agreement, over the next 27 months, to introduce any new tax at all. We are going to focus on tax compliance, and we are going to focus on widening the tax net,” he said, as he sought to ease fears by some Jamaicans that there will be increased taxation as a result of the IMF agreement.
The Minister was speaking at a post Budget forum under the theme: ‘Fiscal Reform: Challenges and Key Success Factors’, held at the Terra Nova All-Suite Hotel, in Kingston, today (April 22).
Noting that the solutions to Jamaica’s problems do not rest solely with the Government, Mr. Shaw said deep-rooted cultural problems, such as tax evasion, have to be dealt with among the general population.
The thrust towards improving tax compliance was hailed by Senior Taxation Manager at Deloitte, Mr. Everald Dewar, who described as “revolutionary” the proposed amendments to the GCT Act, which will introduce higher fines as well as custodial sentences for certain offences. He noted that while tax evasion is a criminal act, there are no stiff penalties under the GCT Act for certain offences.
“The Government will make further structural changes to improve efficiency and the emphasis will be on compliance.There will be consequences for non-compliance so be prepared to be audited, so it’s better to be prepared and compliant,” he warned businesses.
Meanwhile, Mr. Shaw said the Government is also working to change the culture of high interest rates with initiatives such as the Jamaica Debt Exchange (JDX). He noted that while the JDX has not yet resulted in a dramatic fall in interest rates, the stage has been set.
The Minister pointed out that the Government has already started to do its part with the cut in the size of the budget as well as reduced borrowing, which should lessen the need to issue high-interest government paper.
Today’s forum was intended to facilitate discussion among relevant stakeholders on issues arising from the just-concluded 2010/11 Budget Debate.