Poison budget – Holness says tax measures will kill poor, industries

“What was presented here to us as a Budget was not medicinal, it will not help recovery, it will not inspire Jamaica to say ‘yes, there is a light at the end of the tunnel as was promised by this Government’. The light you thought you saw was the Peter Phillips and the Portia Simpson Miller tax train coming at you without mercy,” the Jamaica Labour Party leader said in making his maiden Budget presentation as opposition leader.

“This Budget is not the bitter medicine; there is no promise in it that the economy will grow; that there is deep, careful and thoughtful people running the country. This Budget is a clear breach of trust and the people are coming to that understanding,” Holness stated.

The opposition leader said the Government’s reneging on its promise to remove General Consumption Tax from electricity, and its move to slap taxes on several basic food items as well as textbooks, was nothing less than “hypocritical” and a far cry from the tax reform promised.

“The tax package he (Phillips) announced last Thursday is being paraded and confused with tax reform. It is a hodgepodge of measures designed to scrape up revenue from wherever they can get it without care and consideration, strategy or direction. The tax package brought to this house is a poison pill designed to kill off the growth industries in telecommunications and tourism, dry up consumer spending, and worst of all further impoverish the poor,” Holness said to howls of protest from Government parliamentarians.

The opposition leader is also predicting that the Administration will not have the guts to carry out tax reform during its term in office either.

“We know too well what will happen with the minister’s three-year implementation proposal. By then the policy cycle will be too close to the election cycle, so tax reform will not get done. This minister, more than any other minister of finance since tax reform has been proposed, has the opportunity to truly reform the tax system in creative ways. Instead, he has turned an opportunity into a crisis,” Holness contended.

“What Minister Peter Phillips has done, with the obvious complicity and agreement of the prime minister, is to tax the poor and use tax reform as a disguise. Placing GCT on basic food items, without developing a system of protecting the poor, violates the principle of equity that guides tax reforms,” Holness said further.

In the meantime, the opposition leader, who had served as education minister while in Government, yesterday criticised Prime Minister Portia Simpson Miller for her silence about the tax on textbooks.

“The current prime minister, then leader of the opposition, called us a wicked Government for attempting to tax literacy, when in our search for revenue we flirted with that tax. Look at you today, so quiet on this matter, how ironic,” Holness said.

“Do not tax books. How do you expect to restore equity in a society if there are disincentives placed on the tools of education?” Holness wanted to know.

He said the Opposition was also at odds with the move to tax animal feeds and seeds, arguing that the majority of farmers are price takers and will not always be able to recover the GCT they bear by increasing their prices.

“The net effect of this tax will be to make small farming unprofitable. This is not the intention of tax reform,” Holness said.

Declaring that the Simpson Miller Administration had, despite its declarations of caring for the poor, “imposed the most oppressive tax packages ever on the backs of the Jamaican people”, Holness said the Government had “played on the fears of the poor and vulnerable” with promises of “better”, only to win last December’s General Elections.

“The people believed you and gave you power. They gave you power because they believed you would protect them and make life better for them. With this tax package the people feel you have deceived them. You never really wanted to help, all you really wanted was power,” the opposition leader charged.

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