Gas taxes reach $31 per litre - Gov't raise cess to fund income tax break


May 13, 2016
Norman Grindley/Chief Photographer Persons gathered at a bar along Princess Street in downtown Kingston to watch the Budget Debate.
Norman Grindley/Chief Photographer Shirley Williams, a vendor in the Coronation Market located in downtown, Kingston.
Omarie Morgan/Photographer Motorists rush to the pumps in order to beat the gas price increase. The Special Consumption Tax on petrol has been increased $7 per litre, effective today.

Jamaicans will have to pay more for petrol, cigarettes, and even departure taxes in order to compensate for a raise in the income tax threshold. However, the country has been spared increases in general consumption tax.

With an additional $7 in gas tax imposed starting today, motorists will now pay about $31 in taxes on every litre of 87 octane gasolene at an expected ex-refinery price of $100 per litre.

Before yesterday's announcement, Jamaicans were paying approximately $24 in taxes on each litre of gas.

Light bills are also likely to increase, as the tax on heavy fuel oil has been revised and a Special Consumption Tax has been imposed on liquefied natural gas, which is mainly used in the generation of electricity.

Finance Minister Audley Shaw, in opening the Budget Debate in Parliament yesterday, announced changes in the tax system. He announced that PAYE earners will pay no taxes on the first $1 million of their income per year starting July 1.

At present, PAYE earners do not pay income tax on the portion of their income up to $592,800 per year.

The new threshold means that persons earning up to $1 million per year will save $8,489 per month in taxes.

The Jamaica Labour Party (JLP) has campaigned on a promise of increasing the income tax threshold to $1.5 million and a giveback of $18,000 per month. That promise, Shaw said, would be fulfilled in April 2017.

Even before Shaw spoke yesterday, anticipation for the Budget was high across the country. In downtown Kingston, several persons suggested many ways that the Government could go about raising funds to pay for the $1.5-million income tax break.

"They should increase ticket fees, especially for bus and taxi drivers," one man said. He reasoned that increasing the fees associated with traffic violations would see a windfall in revenues. Another man suggested a hike in taxes on gaming products such as Cash Pot and Lotto.

But Shaw did not impose any new taxes on gambling; nor did he announce any increase in fees for traffic tickets, although these will be increased with the passage of the Road Traffic Bill which is yet to be retabled.

He said that the Government had embarked on a ccomprehensive reform that seeks to leave more money in the pockets of ordinary Jamaicans.

However, Opposition Leader Portia Simpson Miller said with the measures announced by Shaw, "it will be the poor of this country that will suffer".

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