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I indicated that there was a sum of $19 billion which had to be closed in terms of the arrangements. The first item in terms of the new tax measures is one to which I have referred before, which is the raising of the threshold to $100,464 per annum. There is a cost of $263 million for the quarter of the fiscal year. It should be noted that oil prices have fallen on the world market and this has been reflected in the significant difference paid at the pump last year as against prices currently prevailing. And although the refinery has adjusted its prices downwards because margins are sometimes applied as fixed amounts, the full impact of these reductions are sometimes not enjoyed by the consumer. It is against the background of falling world prices and reduced prices at the pump that opportunity is being taken to earn some additional revenue at a time when it is likely to be least painful to the consumers. It is proposed to increase the Special Consumption Tax on leaded gasoline, unleaded gasoline, automotive diesel oil and kerosene oil. The tax on premium will be increased by $2.8271 per litre; the tax on unleaded will be increased by $2.6919; the tax on automotive diesel will be increased by $2.3901. It is also proposed to increase the prices of domestic kerosene by $2.3901 to discourage the practice of this cheaper product being used to contaminate gasoline. In spite of these increases the new prices for gasoline in Jamaica remain the cheapest in the Caribbean and possibly in the world. Regular gasoline in Jamaica with the new increase should be US$1.53; Bahamas is $2.50 per gallon; Barbados $2.73; Dominican Republic $1.57; Belize $2.35 and the U.K. $4.26. The only place where price is lower is Trinidad and Tobago at $1.29. For unleaded gasoline the new price should be $1.56 per US gallon. The new prices take effect on April 17 and the estimated yield for fiscal year 1998/99 is $2,368 million. It is also proposed to remove the 5 per cent CET on crude oil and to recover the tax foregone by increasing the Special Consumption Tax on specified products. In addition, we will reduce the CET on various finished petroleum products from 15 per cent to 10 per cent in order to maintain the margin of 10 percentage points between the duty on crude oil and finished products. The shift in taxes will mean that the cost of fuel to JPS will not increase because of this arrangement. It is proposed to increase the Special Consumption Tax on cigarettes by 11.6 per cent. The increase in the tax is expected to result in an increase in the per stick price of $1 each and is estimated to yield $127 million in Special Consumption Tax, and an additional $75 million in GCT. The date of effect will be April 17. It is proposed to increase the CET rates of duty applicable to motor cars and similar typ of vehicles by 10 percentage points. The measure is expected to yield approximately $60 million for 1998/99. It is proposed to tax the benefit arising from concessionary rates of interest granted t employees/directors in the financial sector. The benefit will be estimated as being the difference between 18 per cent and the building society rate of interest and the rate charge but employees pay sometimes as low as 3 per cent. This measure will take effect on January 1, 1999 and is estimated to yield $28 million for the fourth quarter of the fiscal year. It is proposed to amend the Travel Tax Act as of June 1, 1998 to increase the departure t paid by non-cruise passengers to $750. This is estimated to yield $230 million. It is proposed to increase the amounts payable for drivers licences, motor vehicle licence and a number of other licences. The measure is estimated to yield $240 million in the fiscal year. It is proposed to increase a wide range of user fees in the Post and Telecommunication Department. We have had consultants who have estimated the cost of mailing a local letter at $60 per 15 gram and an overseas letter at $70 per 15 gram. This contrasts with the revenue earned by the post office of $2.50 for the local letter and between $10 and $18 for the overseas letter. The proposal is to double the cost per 15 gram for overseas letters. Th estimated incremental revenue is $30 million. It is proposed to introduce a processing fee of $100 each for various documents issued b the Customs Department. It is proposed to introduce certain increases to documents issued by the Criminal Investigation Bureau of the Police Department. The Immigration and Passport Department provides a wide range of services. It is pro posed to increase the existing fees of most of these services with a new passport moving from the existing $400 to $1,000. The increases are expected to yield $51 million during the year. In terms of the Island Traffic Authority, it is proposed to increase fees charged by the Authority on Certificates of Fitness, Certification of Motor Vehicle, Examination Fees Valuation Fees. The changes are expected to yield $357 million. In summary, the tax measures will yield $3,950 million for the fiscal year, the user fees will yield approximately $493 million for the fiscal year. Against that we will forego $263 million because of the increase in the threshold. That sum, coupled with the external market loans, which we have indicated we intend to raise will bring you a total of $18.7 billion, which closes the gap which I indicated at the beginning. || Previous | Table of Contents | Next ||
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