Golding attacks tax package, says scrap GCT on bottled water to promote healthy choices

Opposition Leader Mark Golding has urged the Government to remove General Consumption Tax (GCT) from bottled water, arguing that the move would encourage healthier consumption more than proposed tax on sweetened drinks.

"The tax on sweetened drinks is imposed on the volume of liquid, not in the amount of sugar, in the container, and therefore provides no incentive for beverage manufacturers to reduce sugar content,” he said Tuesday.

He was making his contribution to the Budget Debate in Gordon House. Golding criticised the Government’s proposed $18-billion package of new tax which is intended to help plug the revenue gap in the 2026/2027 national budget, which begins April 1.

He questioned the design of the proposed tax on sweetened beverages, arguing that it would not achieve its stated public health objectives.

“As our Finance Spokesperson pointed out, despite the way in which they have been sold to the public, neither of those taxes is designed in a way which will improve public health or support environmental causes,” he said.

Golding added that the Government’s expectation of collecting revenue from the measure suggested it was not designed to reduce consumption, a position previously argued by his finance spokesman Julian Robinson.

“Furthermore, the mere fact that the Government intends to collect this tax means that it intends for the beverages to be purchased so as to generate the tax, not to reduce consumption.”

Highlighting the cost disparity between bottled water and fuel, Golding said removing GCT from water would make healthier options more accessible.

“This bottle of water contains 500ML, and it cost J$100 in the corner shop or on the street. Two of these bottles of water make one litre and cost J$200. A litre of gas is J$185 at the pump. Water costs more than gas! If we really want to encourage healthy consumption, remove GCT from water and other healthy alternatives so that people can afford to buy them.”

Golding also criticised the Government’s proposed increase in the Environmental Protection Levy (EPL), arguing that it does not directly fund environmental protection.

“The EPL has nothing to do with environmental protection. Despite its name, it goes into the Consolidated Fund as general revenue like any other tax, and is not earmarked to fund expenditures to protect the environment.”

He further argued that the changes to the levy could disadvantage local manufacturers relative to importers.

“The Government is now going to apply the EPL to 100% of the sale price of locally manufactured goods, in addition to increasing the EPL from 0.5% to 0.8%. This means that the cost burden of the EPL to local manufacturers will be greater than it is to importers, favouring imports over local manufacturing of competing products.”

Golding described the proposed change as “a major design flaw in the new tax, which needs to be corrected.”

The opposition leader argued that the proposed measures would disproportionately affect low-income households.

“Looking at the specific tax measures, they are problematic. $10.1 billion of the tax package is on sweetened beverages and will mainly come out of the pockets of low-income households. Similarly, the $3.6 billion increase in the Environmental Protection Levy will be borne by consumers.”

Golding said Jamaicans are grappling with economic pressures following Hurricane Melissa, and warned the measures could worsen the situation.

“Jamaicans are already facing hard times, with a cost-of-living crisis after the Melissa disaster, and it will be made even worse by the tax package the Government is imposing on the people. These revenue measures will have an inflationary impact, pushing up the cost of living on the Jamaican people at a time when the cost-of-living spikes due to the war in the Middle East.”

Tax on digital services

Golding also questioned the Government’s decision to impose GCT on digital services and intangibles purchased from overseas providers, which is projected to raise $300 million in the final quarter of the 2026/27 fiscal year and $4.2 billion in 2027/28.

“Then in her Budget speech last Tuesday the minister has spread confusion and muddied the waters, by seeking to justify this new tax as protecting local retailers. How can imposing GCT on digital services help local retailers? This is policy incoherence.”

Golding noted that the Government had already provided an incentive for imported goods purchased online in 2024 by doubling the customs duty threshold from US$50 to US$100.

Follow The Gleaner on X, formerly Twitter, and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.