Our Chart of the Week is the summary of 2013/2014 Government of Jamaica Revenue Measures that were announced in February 2013.
On April 18, 2013, during his budget presentation Minister of Finance Dr. Peter Phillips announced that there would be no new taxes added to the revenue measures that were previously announced in February 2013.
In regards to the IMF programme the matter of tax revenues is extremely integral, so much so that there is an indicative target on tax revenues (See Quantitative Performance Criteria). The target for tax revenues at the end of June should have been a minimum of J$73.3Bln.
The fact that there is a target highlights the importance of improving tax administration and tax reform and also to help avoid reliance on ad hoc spending cuts for meeting the fiscal targets and attaining the targeted fiscal surplus of 7.5% of GDP for this fiscal year.
However, an interesting development has revealed that the government plans to implement a flat-tax that public-transport operators will be required to pay by as early as August 2013 (See more on this story here).
The new tax will have serious implications for commuters who rely on public transportation daily. The effect of this proposed flat-tax to be paid by public-transport operators is the possibility of an increase in inflation.
The Consumer Price Index (inflation) is 1 out of the 15 common indicators required for surveillance by the IMF which the government is required to report monthly to IMF staff. The Memorandum of Economic and Financial Policies ¶9 speaks to the projected fall in inflation to an estimated 8% by 2016/17. As such, there is little room in our economy for any inflationary actions.