“Cherry-Picking” Tax Reform?

Given its significance, the reform of tax policy and administration has been a central issue to both the private sector and the government  (for every administration since Independence).  For many years, work has been undertaken in a structured manner to examine the issues in a comprehensive way.  This work has involved consultation with a broad cross-section of stakeholders, and the assistance of tax professionals (local and overseas).  The reports produced clearly outline the context within which recommendations have been made and specifically caution against selectively choosing measures. To make your own assessment, these reports are presented below in full:

2012

On 15 February 2012, the Submission of The Private Sector Working Group on Tax Reform was presented to the Taxation Committee of Parliament.

As defined in the document:

“This document reflects a comprehensive suite of proposed tax reform measures developed by a Private Sector Working Group on Tax Reform (‘the Working Group’) in response to the Government of Jamaica’s recently published Green Paper on Tax Reform. The working group consists of a broad cross section of business associations including the PSOJ (representing some 21 business associations), JMA, JEA, JCC, JAPA, JBA, IAJ and the MSME Alliance (representing some 35 business associations)”

From the introduction:

“The value of the whole reform package is much greater than the sum of its individual parts.

It is therefore presented as a complete suite and not as a menu of discrete reform options.

Past attempts at comprehensive tax reform have failed in part as a result of the political “cherry-picking” of discrete revenue measures in an effort to address issues of the day at the expense of implementing more holistic and lasting reform.

It is critical to again note that the agreement reached by the multiple business associations (highlighted above) to support this proposed reform package is conditional on the package being implemented in its entirety.”

For a summarized power point presentation, see PSWG Tax Reform Proposal (available in a slideshow at diGJamaica.com/tax_reform).  To read the report in full see:  Submission of Private Sector Working Group to the Parliamentary Tax Committee

 

2004

On November 30, 2004, the Final Report of the Tax Policy Review Committee was presented to the Government of Jamaica.

From the introduction:

The reform package presented should not be considered simply as a “menu” of reform options from which preferred positions may be selected.

Rather, the committee wishes to emphasize that in making its recommendations, the impacts in terms of economic effects, burden distribution, equity etc. have been measured based upon the outcome of the recommended package as a whole and given the interaction of all proposed measures.

Any changes which government in its wisdom may deem appropriate should therefore be measured in the same light if the hoped-for internal consistency of the tax system is to be preserved.”

To read this 2004 report in full – including the terms of reference of the committee, membership, methodology and recommendations see Final Report: Tax Policy Review Committee Report