Country to hear how government will roll back GCT on light bills

The country is expected to hear soon how the government intends to address an election promise to remove general consumption tax on electricity.

Energy Minister Phillip Paulwell told parliament today that a promise made by the People's National Party will be fulfilled and the process would emerge during the budget debate set for next month.

He was responding to questions from Opposition spokesman on Energy Gregory Mair about GCT on electricity.

In 2010, the Jamaica Labour Party administration imposed GCT on electricity use of more than 200 kilowatt hours per month. The tax was criticized by some with the government pointing out that most Jamaicans would not pay the tax.

During the campaign for the last elections PNP president Portia Simpson-Miller said if elected she would remove the GCT from electricity.

In dealing with the issue in the house this afternoon, Mr Paulwell said three quarters of JPS residential customers did not pay the GCT on electricity use as they fell below the threshold.

Meanwhile, Mr Mair suggested that increasing the GCT exemption threshold to 250 or 300 kilowatt hours per month would benefit more Jamaicans or cause fewer residential customers to pay GCT on electricity.

Mr Mair argued that some 76 per cent of residential customers do not pay GCT and if removed it is high end users including those categorized as industrial and commercial that would benefit.

He added that monies collected could go towards addressing renewable energy issues as also other challenges arising from increased fuel costs.

Mr Paulwell pointed to the budget process saying the proposals would be given consideration.

Meanwhile, the general consumption tax collected by the government on electricity amounted to more than $1.5 billion for one financial year.

Responding to questions from Opposition spokesman on Energy Gregory Mair, Minister Paulwell told parliament that $1.6 billion had been collected in GCT for the fiscal year 2010/2011.

That is the first full year after the former administration imposed the taxes that is collected at source or by the JPS and paid directly to the government.

Jamaican households using more than 200 kilowatts of electricity or in the region of $5,000 per month pay GCT of 10 per cent on their bills.