Government outlines tax measures to raise $23.4 b
The government has set out a raft of taxes to raise $23.4 b to help finance the 2012-2013 budget.
The taxes include the basic increase in price on white rum, to higher taxes on liquor for hotels and a hotel room tax of up to US $12 per room, per night.
The tax on hotel room occupancy will rake in over $2 b.
Motorists will pay 50 % more for licensing or registration of their vehicles and for licence plates.
The Common External Tariff will also be increased on motor vehicles with engines over 2000 CC’s.
The increase will not apply to buses, trucks and agricultural vehicles.
Increased tax will also apply to vehicle spare parts and jewellery.
Every registered company will pay $60,000 a year and banks and other financial institutions will also pay an increased asset tax or a tax on all their total assets.
Gamblers who win will pay more taxes, up from 15 % to 20 %.
The wide range of taxes and details have been set out in Ministry Papers tabled in the House today (May 24).
In setting out the measures to raise the taxes, Finance Minister Dr. Peter Phillips said the increased revenue would help to reduce the amount of money that will have to be borrowed.
Meanwhile, the General Consumption Tax (GCT) rate is to be cut by 1%, to 16.5 %,as of next week Friday, June 1.
Dr. Phillips said this one percentage point cut from the current rate of 17.5 % was the first in a number of steps to be taken to reduce the standard rate of the GCT over the medium term.
The Private Sector Working Group has recommended that the government cut the rate to 12. 5 % and remove the wide range of exemptions.
Dr. Phillips announced that the poor and vulnerable would be protected and that a large number of items would still not attract GCT or be exempt.
However, some food items that previously did not attract GCT will now come under the GCT regime at 16.5 %, meaning those product prices will go up.
At the same time, GCT payable on electricity use will go up from 10% to 16.5 %.
But, fewer people will pay GCT on their electricity bills, as now, GCT will apply only to households using over 300 kilowatt hours, up from 200 kilowatt hours.
Dr. Phillips said GCT will apply to only 10% of JPS residential customers, or just over 52,000 households.