KINGSTON, Jamaica – Finance and the Public Service Minister Dr Nigel Clarke announced on Tuesday that the Government will not be introducing any new taxes to fund the J$830.8-billion (US$5.6 billion) Budget for 2021/22.
“We are prioritising economic recovery, which we want to achieve in the quickest possible time. Increasing taxes at this time would run counter to that objective,” he said as he opened the Budget debate in the House of Representatives.
Minister Clarke noted that “this is the sixth consecutive fiscal year where, on a net basis, we have not raised taxes and the fourth consecutive fiscal year where there will be absolutely no new taxes”.
Turning to calls for an increase in the US$50 limit for items that may be imported duty-free, he informed that the Government will not be able to do so at this time. He noted that the effect of the threshold increase would be that Jamaicans could import higher-value items without duties and taxes being levied on them.
“I understand the request, but at this time, when the Government’s revenues are falling precipitously when we are still in the middle of a pandemic… it would be unwise to erode our revenue base with such a move,” he pointed out.
The Finance Minister further noted that such a move could make the domestic and retail trade uncompetitive, threatening jobs and economic growth.
Meanwhile, he told the House that the Government will be abolishing the Customs Administrative Fee (CAF) for permanent exports of a value less than or equal to US$500 and this is estimated to cost $70 million.
Customs has levied a CAF on the export of goods since 2013, replacing the customer user fee, which was deemed non-compliant by the World Trade Organisation (WTO).
Clarke outlined that the CAF was set at $3 000 per customs export declaration and has remained at that level for the past seven years, but this fee made it difficult for exporters of local goods, most of whom are small business owners, to remain competitive. (CMC)
