Friday, April 24, 2009

A snapshopt of the budget....

So despite the frenzied rumors there were no roadblocks after the reading of the budget. True, there were some minor incidents here and there but not the widespread civil unrest that Jamaicans seem to now associate with fuel taxes.

While I am no economist by any stretch of the imagination (and for what it is worth also totally apolitical) , I think the government has adopted an interesting approach to funding the budget. The new budget has tried to ensure (or so it seems) a more equitable distribution of taxes among a broader cross section of the people, by moving away from taxing income - that remains the same, and in fact the taxable income bracket has in fact been increased - towards a situation whereby taxes on basic items such as food and petrol have attracted the larger share of the increases. Bottom line, people must buy food and must travel but yes, they don't always pay their taxes do they.

Just by way of a snapshot:
  • The income tax threshold will be increased from JD$ 220,272 to JD$320, 736 effective July 1, 2009 with another increase to JD$ 441,168 for January 1, 2010
  • Persons aged 55-65 will also see the non-taxable part of their income increased to JD$400,736, while those over 65 will have theirs increased to JD$ 480,736
  • Stamp duty and transfer taxes have also been reduced
So that was the good news - then on to the more serious side of things:
  • As was expected, there is an additional JD$ 8.75 on each litre of petrol bought
  • Additionally, a number of additional food items, previously untaxed will now attract the 16.5% general consumption tax (GCT). These include but are not limited to :printed materials not including newspapers, salt, rolled oats, syrup, fish, and packet soups.
  • Telephones (importation and sales) will also attract a 20% GCT.
A number of other costs for government services will also be increased, but yes, would like to get a copy so I can be a bit more factual in my snapshot.

The response from the Opposition will be done on Tuesday, but already there are report of 'Poor-tia's lament', a spoof on the name of the leader of the Opposition and previous Prime Minister Portia Simpson-Miller.

Perhaps what was the most surprising thing for me in the whole debate was the small number of persons who were actually paying PAYE (pay as you earn). Of a population of 2.8 million people, the tax base is under 400,000! (closer to 350,000 if memory serves me correct). The Minister did mention an amnesty as a way of getting persons to come in and pay up, and also promised harsher measures for those that were still intent on dodging the system. The financial and economic gurus are still dissecting and giving their sometimes seeming vacuous comments. It's funny how very little can be said in overly long programmes of vigorous debate.

So there - a budget read, taxes - including on petrol increased - and no road blocks! Could it be that as a people we are finally maturing? The more skeptical of my friends think that people will only see the real implications the next time they go to the pumps, and the supermarket. There is also the feel that the Opposition is just regrouping itself to 'pay back' for the 1999 riots that the now Government was rumored to have engineered. Me? I believe that we have matured and though things will be decidedly harder, I think most Jamaicans realise that with declines in tourism, and with an all time low demand for bauxite there are very few options left.

An aside: the current 'joke' making the rounds is that Stephen Fray, our erstwhile hijacker couldn't have been mad. He was after all smart enough to hijack a plane that was filled primarily with Canadians, as opposed to a flight to Miami or Panama that would have been filled with Jamaican higglers - informal commercial importers as they are politically known. These ladies are known to strike terror into the heart of the bravest of the brave and would have no doubt kuffum-ed (local word for slap or beat) and ask him 'bway, yu stupid? yu nuh know mi dey pon a mission and yu a waste mi time? Eeeh? Tek yu whatsitnotsit and kum offa di plane before wi bruk up yu rass'.

Trust me, you have to see these women to believe and understand this joke. They are usually fluffy (the latest term in Jamaican slang to describe overly fat women) and are noted for their mode of dress - usually impy-skimpy complimented by lace and taffeta in various colours, designer brands no less, topped off by a wig that is colour coordinated with what ever outfit is being worn that day.

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