(Jamaica Gleaner) – Reacting to torrents of criticism nationwide and threats of street demonstrations by the opposition, Prime Minister Bruce Golding on Sunday succumbed to pressure over a $21 billion tax package slated to take effect on January 1, 2010.
In a statement from Jamaica House, Golding said he would reconsider the package which, as it stands, brings the total amount of new taxes announced in three tranches to $47.6 billion this fiscal year.
The statement, which did not give a timetable for the review, came less than two hours after Opposition Leader Portia Simpson Miller charged members of her party to lead national protests unless the taxes are withdrawn.
“I have heard the cry and the appeal of the Jamaican people,” Golding’s statement said.
“It is my intention to re-examine the existing composition of the tax package in order to determine if there are suitable alternatives to finding the $21 billion of revenue required to support the programme negotiated with the IMF (International Monetary Fund), while at the same time reducing the harsh impact on the society, especially the poor and vulnerable, during these very difficult times,” the prime minister added.
But in a swift response last night, Simpson Miller said Golding’s statement was not reassuring, nor would it stop the party from staging non-violent street demonstrations.
Meanwhile, the opposition has called for the resignation of Audley Shaw as minister of finance. The party said booting Shaw head would rescue the “waning credibility of the government”.
On the matter of national protests, Simpson Miller said she would not give Golding any time frame in which to withdraw the tax package.
“He should know what he wants. If he wants no action and no protests, he should act quickly,” she told The Gleaner, adding that the prime minister should reconvene Parliament today to announce a backtrack.
“This release is not going to stop us. It is not about the People’s National Party. It is a national response to a national problem,” Simpson Miller told The Gleaner.
Last Thursday, Finance Minister Audley Shaw announced a $21.8 billion tax package, the third of the fiscal year.
The government announced an expansion of the general consumption tax (GCT) base, which subjected every basic food item, except rice and flour, to taxation.
The government also increased the GCT rate from 16.5 per cent to 17.5 per cent and subjected items such as sanitary napkins, and aids for the disabled, to GCT.
The government has said the effects of the global economic crisis have knocked the wind out of the country’s sails. Shaw told Parliament last week that there was a need to cut the Budget deficit, rein in spending and increase revenue.
Dr Omar Davies, the opposition spokesman on finance, said that if the tax on the interest of government bonds was increased from 25 per cent to 33.3 per cent, it would have raised $5 billion in the last seven months.
Simpson Miller had rallied the troops of the party to an emergency National Executive Council meeting yesterday at the University of the West Indies.
“Go forth, Comrades, with discipline. Await the instructions for the various protests across this country against this cruel and wicked taxation package,” Simpson Miller bellowed.
Meanwhile, in a press release that was issued just minutes after Jamaica House sent out a statement, Generation 2000 (G2K), the young professionals’ affiliate of the ruling Jamaica Labour Party, commended the Government for its intention to re-examine the tax plan.
“There is no doubt whatsoever that the tax package is harsh and will impose, in the short term, even more challenges for the Jamaican people,” G2K said.
