Gov’t to slash GCT on light bills - But previously exempted customers will be required to pay tariff

In a bold move that promises to impact every Jamaican household, Prime Minister Andrew Holness announced changes that, starting next year, will result in all customers of the Jamaica Public Service (JPS) being required to pay General Consumption Tax (GCT) on their electricity bills.

However, there is a silver lining for those with lower consumption, as they will benefit from a new tax rebate aimed at easing the financial burden. In addition, the GCT on electricity will be charged at a significantly reduced rate.

The new policy was announced by Prime Minister Andrew Holness at the Jamaica Labour Party (JLP) 81st annual conference in St Andrew on Sunday.

"After the next budget, the Government will reduce the GCT on electricity from 15 per cent to seven per cent," the prime minister said.

"Everybody complains about their electricity bill," Holness said, adding that more can be done to make electricity more affordable for minimum wage and low income earners.

At present, GCT is charged on the portion of the electricity bill over 150 kwh. In 2017, it was estimated that about 60 per cent of JPS' residential customers are not affected by the tax on electricity. The policy change announced by Holness will see potentially more households benefiting, but they will have to pay the taxes upfront.

"We will remove the non-tax threshold and replace this with an incentive compatible rebate of GCT for persons who use 200 kilowatt hours, or less, per month," Holness said.

Finance Minister Fayval Williams says it will cost approximately $1.5 billion annually to fund the proposed cut in the GCT.

"That's not a budget buster," she said, following the announcement by Holness.

The JLP is in a quest to win a third term in office, which would close in on the record set by the People's National Party (PNP) that won consecutive elections in 1989, 1993, 1997 and 2002.

Holness led the JLP to power in 2016, and again in 2020. The next general election is due by September next year, and Holness said the party can run on its record of achievements.

"For the first time ever, a government can campaign on what it has achieved. For the first time ever, a government can campaign on showing the people what will come, not empty promises," Holness said.

In the meantime, party chairman Robert Montague said both the government and the party have more work to do ahead of the next general election.

"We are in no rush for any election. Dr Holness will call it when Dr Holness is ready," Montague said.

He said the government has a lot of projects in the pipeline and will be rolling them out soon.

"In St Mary and elsewhere, we have water projects to finish and road works to start," he said. "We apologise to all road users but Dr Holness' plan for roads soon buss, and yuh will see.

"Roads right across Jamaica are bad, but work soon start on them."