At JMMB's spectacle conclusive week, Dr Damien King esteemed that the best advance to deal with our debt problem is through faster growth, and that assess reform is the quickest and best headway to achieve quick gains in this area. The uncommitted Caribbean Policy Research Institute (of which Dr King is a tone member) has also illustrious that "simplification of the impose system and unification of rates across commodity categories and customs entities will expansion the know-how of tax collection by eliminating opportunities for avoidance and evasion". In their division manifesto, the creative government has also expressed the requisition for a comprehensive tax rehabilitation programme designed to simplify the exhaust system, make it more equitable, disconnect disincentives to investment and job genesis and ensure greater compliance. A encyclopedic review of Jamaica's overload system was last undertaken just a few straitened years ago in the period 2003 to 2004 by a GOJ-sponsored council chaired by businessman Joseph M Matalon.
That board worked along with a duo of detailed consultants headed by Professor Roy Bahl of Georgia State University in the USA. Among other things they produced a "proposed packet of reforms for concern by Government" in their "Final Report of the Tax Policy Review Committee to the Government of Jamaica November 30th 2004" (the misdesignated "Matalon Report"). Unfortunately, very youthful of the reforms proposed in the Matalon Report have been implemented even though the Tax Policy Review Committee certainly stated: "The reorganize container presented should not be considered sparely as a "menu" of improve options from which preferred positions may be selected. Rather, the body wishes to emphasise that in making its recommendations, the impacts in terms of trade effects, pressure distribution, equity, etc have been sedate based upon the development of the recommended combine as a entire and given the interaction of all proposed measures. Any changes which domination in its sagacity may deem germane should therefore be cadenced in the same taper if the hoped-for internal consistency of the encumber group is to be preserved.
" One of the background papers to the circulate modelled the macroeconomic effect of tax reforms in Jamaica with the essential result that simply increasing rates under the existing c scot structure will offer a low tax yield and height efficiency costs. A dive PSOJ/JCC committee prepared a whereabouts paper for National Summit between the Government and the Private Sector held in antiquated November wear year, largely based on the Report of The Tax Policy Review Committee. What follows are a few highlights of the paper. The translation fix - GCT According to the Matalon Report, "The gate productivity and the fairness of the GCT could be addressed by eliminating all non-export duck rates other than those required by foreign convention, together with a significant total of the immunity list." The concealed sector panel concluded that all items should be taxable at the regulatory rate.
Zero rating should be eliminated and all immune items should be reviewed with a projection to going them to a taxable status. Personal Income Tax The cabinet argued that Jamaica needs to re-examine whether it makes reason to rely on receipts tax, noting that its non-performance to crop inequality, in well-known with many other developing countries, is not surprising as it amounts to mean more than withholding taxes on struggle income in the formal sector. It eminent that the costs associated with gravely designed and badly administered disparaging income tax systems suitable exceed the costs associated with other taxes, and that given the ineffectiveness of the offensive profit tax, if countries want to use the fiscal set-up to reduce poverty or reduce inequality, choice approaches merit consideration. The commission noted that the benefits of in the flesh income tax reform, including measures such as raising the threshold, included "lowering of the sell for of labour, a reduction in the crowd of further proceeds workers on the tax rolls, and administrative simplification". Corporate Income Tax The example compute of corporate gain tax needs to be reduced from 33 1/3 per cent to overturn it into work with the personal return tax rate of 25 per cent.
The bang respected that whilst tax rates are a moneylender in attracting Foreign Direct Investment, beautiful and consistent administration can be even more important. Tax on Dividends The committee supported the judge that the in the know two-ply taxation of private company dividends must be eliminated. Common External Tariff (CET) There are 10 prime impost categories, with numerous exemptions and rates that change widely.
An breakdown of C78 customs forms over an extended era undertaken as role of the Matalon Report yields surprising results. The standard weighted applied or statutory percentage of taxes paid on imports was a dim over 10 per cent. Even more surprising is the accomplishment that the unexceptional weighted unexcited scale of taxes on imports amounts to just over five per cent. The imbalance between this and the run-of-the-mill statutory figure of 10 per cent is accounted for by a completely variety of exemptions, reliefs and waivers granted under various pieces of legislation.
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