"Read My Lips...No New Taxes": Both Administrations are to be credited
One more Opening Budget Presentation in the bag for Man a Yaad and Minister of Finance Audley Shaw. The new alarming ringtone for the year is No New Taxes.
For the first time in fourteen years, there is some relief for the Jamaican people. Each year, with the exception of Fiscal Year 2004/05, the Jamaican people have had to shoulder more and more taxes. Over the past two years, the Government has been on a drive to shift from direct taxation to indirect taxation. With revenues surpassing the targets there is enough fiscal space to not introduce any new taxes this year.
Additionally, the debt servicing component of the budget has been reduced to 37% of expenditure. When I started paying keen attention to the national budget in 2009 the debt serving component was well over 50% of total expenditure. The government has also committed to reducing our national debt-to-GDP ratio which was as high as 147% in Fiscal Year 2012/13. The expectation for the end of the fiscal year is a Public Debt to GDP ratio of 105%.
The Minister further highlighted the continuous passing of IMF structural benchmarks as well as highlighted a myriad of new Projects to be undertaken.
He also zeroed in the increase in budgetary allocation to Education, National Security, Physical Infrastructure as well as social programs.
For the ongoing wage negotiations, he asserts that the public sector workers will receive 16% over 4 years with a new 4-year arrangement as opposed to a year arrangement. I believe this is a more than generous package given the circumstances of fiscal space. What many persons have failed to take into account is that the $1.5 million income tax threshold represented increases in net pay for most public sector workers.
As a Jamaica moves to a lower inflation rate environment price changes can be better anticipated which means that with the right conditions and improved tax compliance we will be able to move to a situation where tax rates can eventually fall.
The goal setting framework and the outlook for Jamaica should be, What do we want Jamaica to look like in 10 years, 15 years, 30 years, 50 years or 100 years? Do we want to focus on Jamaica or focus on political affiliation? No Party is perfect but the development of the country is bigger than party, it needs a concerted effort by all Jamaicans to play their part.
It requires discipline, trust in institutions, Education, and Innovation. As an Economist my personal view is that the government is not responsible for everything. Its role is to provide an environment in which private sector can thrive and grow.
For the first time in fourteen years, there is some relief for the Jamaican people. Each year, with the exception of Fiscal Year 2004/05, the Jamaican people have had to shoulder more and more taxes. Over the past two years, the Government has been on a drive to shift from direct taxation to indirect taxation. With revenues surpassing the targets there is enough fiscal space to not introduce any new taxes this year.
Additionally, the debt servicing component of the budget has been reduced to 37% of expenditure. When I started paying keen attention to the national budget in 2009 the debt serving component was well over 50% of total expenditure. The government has also committed to reducing our national debt-to-GDP ratio which was as high as 147% in Fiscal Year 2012/13. The expectation for the end of the fiscal year is a Public Debt to GDP ratio of 105%.
The Minister further highlighted the continuous passing of IMF structural benchmarks as well as highlighted a myriad of new Projects to be undertaken.
He also zeroed in the increase in budgetary allocation to Education, National Security, Physical Infrastructure as well as social programs.
For the ongoing wage negotiations, he asserts that the public sector workers will receive 16% over 4 years with a new 4-year arrangement as opposed to a year arrangement. I believe this is a more than generous package given the circumstances of fiscal space. What many persons have failed to take into account is that the $1.5 million income tax threshold represented increases in net pay for most public sector workers.
As a Jamaica moves to a lower inflation rate environment price changes can be better anticipated which means that with the right conditions and improved tax compliance we will be able to move to a situation where tax rates can eventually fall.
The goal setting framework and the outlook for Jamaica should be, What do we want Jamaica to look like in 10 years, 15 years, 30 years, 50 years or 100 years? Do we want to focus on Jamaica or focus on political affiliation? No Party is perfect but the development of the country is bigger than party, it needs a concerted effort by all Jamaicans to play their part.
It requires discipline, trust in institutions, Education, and Innovation. As an Economist my personal view is that the government is not responsible for everything. Its role is to provide an environment in which private sector can thrive and grow.
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