The Jamaica government will sign an agreement with the International Monetary Fund (IMF) later this month that will necessitate new taxes. Prime Minister Bruce Golding is warning that increased taxes is the only way his government can fill a budget shortfall to satisfy the IMF's conditions.
"We'll have to find new taxes that can be collected, almost immediately," Golding said in a media broadcast Sunday night.
Golding did not provide details of the proposed new taxation but noted that by the end of October there was a revenue shortfall of J$17.8 billion (US$201.6 million) and expenditure was J$7 billion (US$83.06 million) lower than expected.
He said the difficulty is that the government cannot simply borrow more. "We're going to have to start closing that gap in this fiscal year," Golding said. "More taxes will have to come," adding that he would have to look and see where the government could collect the additional taxes."
The Golding government has already announced tax increases twice during the fiscal year which began on April 1 and this would be the third hike.
The deal with the IMF is for a US$1.2 billion Standby Agreement. Golding said an IMF team is currently in Jamaica for critical discussions.
"We've pretty much cleared all the major hurdles, and I hope we'll be able to conclude it this week," Golding said. He added that even if there are delays he is optimistic that the government and the IMF would conclude the deal by Christmas.
Golding has warned that the IMF agreement won't solve all the nation's economic problems, noting that the finance ministry cannot use the US$1.2 billion for budgetary support.
The IMF support, he explained, will fill the gap that has been left by the shortfall in foreign exchange earnings to enable the government to pay for oil imports and other necessities such as raw materials that manufacturers.
"The funds that we normally use to pay for those things are no longer flowing in the way that they used to flow," he noted.
No comments:
Post a Comment