Oh, there were rumours that uprisings and demonstrations would have occurred yesterday (much akin to those that occurred in 1999, following the announcement of a gas tax), so much so that some businesses closed early to allow their staff to get home before the anticipated melee...
But these rumours were unfounded, as the Jamaican Finance Minister, Audley Shaw, made his Budget Presentation for 2009/2010, in Parliament, yesterday.
He told us how Jamaica would make up for the JMD (Jamaican Dollar) $18 billion shortfall in the JMD $556.7 billion budget for 2009/2010.
(A budget has two components - expected expenses and expected revenues to meet said expenses for a specific period of time. Jamaica needs $556.7 billion in revenues to meet the 556.7 billion of expected expenses for the fiscal year April 2009 to March 2010 (2009/2010).
$538.7 billion of this revenue will be obtained by loans and old taxes. Thus leaving a $18 billion shortfall or deficit. Yesterday Mr. Shaw outlined how he would get the revenue to make up for the $18 billion shortfall.)
Highlights of his presentation are as follows:
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The income tax threshold is to be increased from JMD $220,000 ($220K) to JMD $440,000. However this will be introduced in phases:
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Phase 1 begins on July 1,2009, with the threshold increasing to $320,000 (from $220K) for the months of July - December 2009. However, as of January 1, 2009, the new income tax threshold will be $440,000
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(What this means is that persons earning less than $440K will not pay income tax)
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There will be a consolidation of payroll taxes and statutory deductions [e.g. HEART contributions, NIS (National Insurance Scheme - a Pension Scheme for all employed Jamaicans) and Education Tax] to give a 31% consolidated income tax
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Yes friends, there will be a gas tax in the form of a Special Consumption Tax of JMD $8.75 per litre of petrol. This will be effective, next Monday, April 27
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Non-residents will pay a 23.1% withholding tax (government tax) on dividends
For real estate owners in Jamaica, Stamp Duty will decrease from 4.5% to 3% and Transfer Tax (tax paid by persons transferring real estate) will decrease from 5% to 4%, effective January 1, 2010
- (In Jamaica, most legal documents must be stamped to make them legally binding. Stamp duties are therefore charged for stamping documents. Documents are therefore stamped as proof of the payment of Stamp Duty & Transfer Taxes, thus making them legal and binding under the Law)
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There will be a 20% GCT (General Consumption Tax) on the importation and sale of telephone equipment
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The items exempt from GCT will be decreased. Minister Audley Shaw, in a Post-Budget Press Conference, today, told the media that printed materials (except newspapers) and computers, will attract a 16.5% GCT. He is expected to further clarify, on Monday, April 27, what categories of printed material will attract the 16.5% GCT. The new list of gazetted (taxable) items will be tabled on Monday.
As usual, Girl With a Purpose (GWAP) Blog will keep you updated re this new list.
Gillian
Sources Include
1) Article, "Further Reductions in Stamp Duty/Transfer Tax", Jamaica Information Service (JIS) website, April 24,2009
2) Article, "National Budget jumps higher", Go-Jamaica.com, April 24,2009
3) Nationwide Radio, April 23, 2009
4) Report on Post-Budget Press Conference, Nationwide Radio, April 24,2009
5) Television Jamaica News at 7:00 p.m., April 23, 2009
6) CVM Television News at 8:00 p.m., April 23, 2009
