High anticipation over $1.5m income tax plan during budget presentation

7:28 am, Thu May 12, 2016

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Audley Shaw- Minister of Finance

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Dennis Chung and Horace Chang

Jamaicans will, on Thursday, hear details on the implementation of the income tax relief plan when Finance Minister Audley Shaw opens the Budget Debate.

The Finance Minister will outline how the Government will remove income tax for persons earning up to $1.5 million annually. Mr. Shaw will also explain how the $580 billion budget will be financed.

Dennis Chung, Chief Executive Officer of the Private Sector Organisation of Jamaica (PSOJ) is expecting an adjustment to the income tax relief plan, with implementation to be done in two phases.

This approach was the one that the PSOJ had recommended, he said, "because the fiscal accounts just can't take it (implementing the full $1.5 million tax relief in the first year)."

Ahead of Mr. Shaw's budget presentation, Dr. Horace Chang, Minister Without Portfolio in the Office of the Prime Minister, told RJR News that the Government was intent on fulfilling its commitments.

"We'll get a good budget, and I advise everybody to listen carefully to Minister Shaw who has done a tremendous job in pulling things together," he said.

He added that the new budget will "begin to reflect the priorities and commitments of this government."

New taxes?

Meanwhile, financial commentator David Wan, says he expects an increase in taxes "in order to close the gap that's gonna be created by the implementation of the new tax regime."

According to him, "It sounds like (the possible taxes) could be in cigarettes as well as LPG gas and some other areas, but this is all speculation right now."

In the meantime, Dennis Chung has cautioned the Government about implementing new revenue measures.

He said a tax on gasoline might be possible but cautioned that if this is done, it could affect the price of several other items.

"You could have an inflational impact if you don't properly look at how you're gonna fund it (the tax plan) because it's not just a matter about shifting around money or where taxes come from," he said.

Peter Phillips absent

Meanwhile, Opposition Spokesman on Finance and Planning, Dr. Peter Phillips, will not be in Gordon House for Mr. Shaw's Budget Presentation. In a release Thursday morning, Dr. Phillips said he was overseas fulfilling a previously scheduled family commitment.

Dr. Phillips said prior to his departure, he spoke with and wrote to the Finance Minister expressing regret at not being present for the presentation and explained his absence. He said Mr. Shaw responded expressing his understanding.

The Opposition Spokesman on Finance will make his contribution to the Budget Debate next Tuesday while Opposition Leader Portia Simpson Miller will speak in the Debate on Thursday.

TVJ will have live coverage of the Finance Minister's presentation.