The government of Trinidad and Tobago is willing to offer financial assistance to Jamaica to help the country deal meet strict conditions to qualify for a loan from the International Monetary Fund (IMF) although the government of Prime Minister Bruce Golding has not asked for help.Jamaica is facing a serious foreign exchange cash flow problem and the IMF is willing to provide the necessary support. However, in order to qualify, it has asked the government to find ways to raise additional domestic revenues.
Last week, Golding announced a series of new taxation measures, but there an immediate tax revolt and the prime minister decided to back away from some of the plans fiscal changes.
Earlier this week he announced drastic changes to the tax package following island wide demonstrations by the Opposition People's National Party (PNP) to protest the new tax measures.
Read the story: IMF brings billion-dollar tax load to Jamaica
He rescinded the General Consumption Tax (GCT) on a list of items announced a week ago, but left the tax at 17.5 per cent.
"All the exempt items except electricity that were scheduled to be brought under GCT will continue to be exempt; that is, no tax will be charged on them. These include foodstuff such as vegetables, ground provisions, flour, wheat, cornmeal, (and) bread," he said.
He also announced that many other items that will remain free of GCT including health products and equipment for the physically handicapped.
The prime minister said the changes would mean that the government would have to look elsewhere to find J$6.2 billion (US$ 69.4 million) to meet the IMF conditions.
Golding said he plans to get some of the additional revenue by asking businesses to pay a five per cent advance on the GCT on taxable goods and by pushing up taxes for people in high income groups.
The changes takes effect on January 1. Golding said the changes are necessary in order to heal the ailing economy and admitted that the choice had no choice, given the prevailing conditions.
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