EU Urges Jamaican Tax Reform

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Above: From left, Industry Minister Dr Christopher Tufton and EU Delegation Head Amb. Marco Alemanni

Private and public sector stakeholders in Jamaica should commit to measures to effect tax reforms and contain wage increases if it is to achieve macroeconomics targets, according to Ambassador Marco Mazzochi Alemanni, the head of the Delegation of the European Union in Jamaica.

A strong commitment to these measures “could be, I believe an excellent incentive to the IDPs [international donor partners] to rapidly re-engage, thereby dispelling any possible risk of rating agencies becoming jittery,” he said.

Alemanni was addressing the Private Sector Organization of Jamaica’s Chairman’s Club Forum in New Kingston.

The ambassador urged quick action on tax reforms to increase inflows, noting that Jamaica regularly falls short of revenue estimates.

He pointed to the Prime Minister’s statement that only 4,000 of 250,000 eligible Jamaicans pay income tax, while 80 percent of company taxes and 50 percent of property taxes are not being paid.

According to the World Bank, Jamaica is ranked 174th out of 183 countries in the ease of paying taxes.

Alemanni also said a policy of wage restraint would help to increase labour productivity and help expand new and existing economic ventures.

“We all agree that the public sector wage bill needs to be reduced,” he said. “Since salaries have been raised, this could be done by taking a decisive and plain approach on attrition, for example, by establishing that, within each monthly period, only two or three public sector vaccines out of 10 can be filled and that the others would be permanently frozen.”

–Jamaica Information Service