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Yesterday December 17, 2009, the Minister of Finance, Mr. Audley Shaw announced in parliament that effective January 01, 2010 the General Consumption Tax (GCT) which is presently 16.5% will be increased to 17.5%. Not only will the GCT be increasing but the list of basic items subject to GCT is also expanding. GCT will also be imposed on the supply of electricity to residential premises, to the supply of sewerage disposal services, to gas tax and to cigarettes. Overall they hope to raise 21.81 billion.
Now, after the Prime Minister, Bruce Goldings, disclosed that there would be increases in taxes as soon as the IMF deal was in place, everyone was ‘kinda’ bracing themselves. However many of us had no idea that they would target all the basic items that the poorest in the society depend on or must use on a daily basis. Examples, salt, sugar, baking flour, eggs, patties, syrup, wheat, fresh fruits, vegetables, ground provisions onions, garlic, meat, cornmeal, sanitary towels and tampons, disposable diapers for the incontinent to name a few. Not to mention the long, long list of medical supplies, educational things, and labour related stuff which are also now included in the GCT net.
So once again the poor people in Jamaica get a royal whipping. At some point there will be diminishing returns from taxation and I’m sure we are very close if not there already. There is going to be a contracting effect on the economy. Crime is going to increase. Poor people can’t bear anymore. Anyway we still have the Christmas to get through. Not sure it will be merry for many but we all ‘haffi’ go be real thrifty from now on.