Contributed
As Jamaica navigates its economic landscape, it's time to reconsider our tax structure. The current system places a significant burden on individual taxpayers, while key industries like tourism and agriculture enjoy exemptions.
Tourism, a major contributor to our GDP (35%), and remittances (10%) are crucial revenue streams. However, hotels have been exempt from direct taxes since 1890, and agricultural incentives offer 0% taxation. It's time for these sectors to contribute their fair share.
Abolishing direct income taxes and focusing on the General Consumption Tax (GCT) could simplify our tax system and promote fairness. A People's Incentives Act could help reduce corruption and level the playing field for all Jamaicans.
The question is: can Jamaica afford to maintain its current tax incentives? Some argue that targeted relief is possible if matched with revenue measures or spending cuts. Others warn that abolishing direct taxes could lead to revenue gaps ¹ ².
I think Jamaica should reconsider its tax policies to promote economic equity and growth now. No time to waste.
Contributor
Michael Spence
Micspen2@hotmail.com
The tax system in Jamaica indeed needs a makeover. This high tax no value system is not working out. Taxing agriculture should be approached with caution as the repercussions could be painful. Tourism on the other hand, once carefully and creatively crafted, taxation of certain services could give big yields. As long as it wouldn't make the country less competitive as a tourist destination.
ReplyDeleteIf something ain't working, try something new. Remove income tax altogether is an option. Some would say the collection of taxes is in need of "digitization", as much is lost in transition. Corruption, a corrosive compound cancels much of what persons have given of their hard-earned income.
Indirect taxes could result in some exorbitant tax rates, as the government believes that would rake in more revenue. That would be counterproductive. Removing income tax though could result in higher consumption and business activities. This would lead to higher levels of productivity.
One doesn't want to use taxes to stifle the economy. Yes, you want the revenue, but at what cost? Gradually modifying the tax system overtime is considered a safe route. Test the waters or take the leap?