IMF Watch – Update On The Flat Tax For Public Transport Operators

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diGgers following on our blogpost “Tax For Public-Transport Operators Coming Soon” when we highlighted the integral role of revenues as it relates to the IMF Agreement, we bring you an update.

Based on sources, it is not fair to classify the ‘flat tax’ as a new tax. The ‘flat tax’ is really an easy alternative to filing annual returns for the operators. The annual ‘flat tax’ to be imposed is a combination of two taxes: Income and Education Tax and two contributions: NIS and NHT, all of which most of us are familiar with as part of Jamaica’s taxation system. Read more here.

Dr. Morias Guy, Minister without Portfolio in the Ministry of Transport, Works and Housing was quoted as saying that “a little over 50 per cent of the operators in this country file tax returns, while about 48 per cent do not file anything.”

In relation to how the Flat Tax impacts the IMF programme, the hope is that the 48% of operators that were not filing their annual returns before, will take advantage of the opportunity to become tax compliant as at 2012/13 and have their outstanding arrears forgiven by paying this tax; while for the government this means additional revenues to assist in servicing our enormous debt and meet other financial obligations.

Quite frankly diGgers, the amount to be collected from the 48% of public transport operators who were not already contributing to the system will be small in comparison to the debt but as the saying goes ‘every mickle mek a muckle’. Further, in the principle of collective responsibility, every Jamaican should make his fair contribution to the development of the country.