No new taxes will be introduced to finance the Government’s $1 trillion budget for the upcoming fiscal year.
This was announced by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, as he opened the 2023/24 Budget Debate in the House of Representatives on Tuesday (March 7).
He indicated that 2023/24 represents the sixth consecutive fiscal year in which “we have not introduced any new taxes for the people of Jamaica” and the eighth year “where we have had no new net taxes.”
Conversely, Dr. Clarke said the Government will be giving up $160 million in general consumption tax (GCT) based on policy changes to facilitate the importation of horses, sheep, pigs, and goats by the Ministry of Agriculture and Fisheries over the next five years to revitalize declining stocks and preserve food security
“These policy changes… will likely generate substantially more and support domestic economic activity,” he said.
The Minister also announced a new policy to be implemented in relation to second sale motor vehicles that will see sellers continuing to pay a flat fee of $12,000 or $18,000.
In addition, registered motor vehicle dealers will pay a rate of 15 per cent general consumption tax (GCT) on the mark-up margin, rather than the full price.
Dr. Clarke further announced that the Income Tax Act will be amended to incentivise householders purchasing solar photovoltaic systems, as part of efforts to reduce energy costs.
This will facilitate the Government’s provision of income tax credits equivalent to 30 per cent of the purchase price, up to a maximum cost of $4 million.
The Minister said these activities are being undertaken “because we are committed to not only preserving our economic recovery, but to increasing it and, more importantly, to share the gains with the people of Jamaica.”
“We believe in Jamaica. We believe and support the people of Jamaica. We are firmly committed to providing the economic environment and resources necessary to ensure that the people of Jamaica grow and prosper.
“Importantly, as we experience gains from economic reform and economic recovery, this Government has shown that we will continue to share those gains with the people of Jamaica,” Dr. Clarke added.
Funds for the 2023/24 Budget are allocated across the main expenditure categories.
These comprise non-debt recurrent expenditure of $665.7 billion, capital expenditure of $75.3 billion, and debt servicing of $280.6 billion.
Central Government revenue and grant inflows are estimated at $897.6 billion, which, alongside the above-the-line expenditure of $887.7 billion, will generate the required fiscal balance surplus of $9.9 billion or 0.3 per cent of gross domestic product (GDP), consistent with fiscal rules.
The corresponding primary balance required for debt service and to generate the targeted fiscal balance is approximately $165 billion or 5.6 per cent of GDP.