New taxes coming but vulnerable Jamaicans 'will be protected' - Finance Minister

Finance Minister Fayval Williams says new taxes will be introduced to fund the upcoming budget as the Holness administration contends with the economic fallout from Hurricane Melissa. She says the most vulnerable "will be protected".

The move will break the administration's decade-long position of imposing no new taxes.

“It must be noted that the impact of the hurricane has reduced our revenue, as economic activity slowed in certain sectors. That creates a fiscal gap that we cannot ignore,” she said in a statement Wednesday evening, hours before Thursday’s tabling of national Budget for the 2026-2027.

“As a responsible Government, we must now take measured steps to close that gap — and that will include new revenue measures.”

She added: “The measures will be calibrated, balanced, and sensitive to the realities facing households and businesses.”

Williams pointed to a Independent Fiscal Commission's report published in January, which said Hurricane Melissa caused an estimated US$8.8 billion in damage — which is about 41 per cent of GDP.

The hurricane, which struck on October 28, caused widespread destruction, killed at least 45 persons, disrupted key sectors including tourism and agriculture, and forced the Government to suspend its fiscal rules on debt reduction to accommodate emergency spending.

“It is in this context that I want to speak with you plainly and directly about what to expect in the upcoming budget,” the minister said. "Despite the extraordinary demands which Hurricane Melissa has imposed on the country, we also must continue to attend to the normal business of government which includes repairing roads and bridges, restoring schools and sustaining hospitals, supporting farmers and small businesses, and strengthening critical infrastructure,” Williams said.

At the same time, she acknowledged that the storm has weakened revenue inflows.

The announcement marks a significant policy shift for the Holness administration, which for a decade has avoided introducing new taxes, a record it proclaimed in last September's general election, which it won to remain in government for a third consecutive term.

Williams argued that financing the full deficit through borrowing would reverse hard-won gains in debt reduction.

“We could choose to finance the entire deficit through borrowing. But Jamaica has already travelled that path with negative outcomes,” she said. “We have lived through the debt trap before — decades of high debt, high interest payments, and limited fiscal space.”

She stressed that while borrowing will form part of the strategy, it will be limited and strategic.

“Borrowing will play a role, but it must be strategic — directed toward capital investments that build resilience and expand our productive capacity: infrastructure, agriculture, logistics, digital systems,” Williams said. “As far as possible, recurrent expenses must be financed by taxation revenue.”

The minister sought to reassure households and businesses that the new measures will be structured with fairness in mind.

“Let me also assure you that equity is central to our approach,” she said. “We are reviewing anomalies in the tax system and ensuring that the burden is shared fairly. The most vulnerable will be protected.”

She added that the measures would be “calibrated, balanced, and sensitive to the realities facing households and businesses.”

The 2026–2027 financial year begins on April 1. The new legislative year will open Thursday, after which Williams is expected to table the Budget in the House of Representatives later in the day.

The full details of the new revenue measures are expected to be outlined during the Budget debate in March.

More details to come.

FULL STATEMENT FROM THE MINISTER OF FINANCE AND THE PUBLIC SERVICE (February 11)

My fellow Jamaicans,

You may have noted that in its Economic and Fiscal Assessment Report which was published in January, the Independent Fiscal Commission said Hurricane Melissa caused an estimated US$8.8 billion in damage — which is about 41 per cent of GDP.

It is in this context that I want to speak with you plainly and directly about what to expect in the upcoming Budget. Despite the extraordinary demands which Hurricane Melissa has imposed on the country, we also must continue to attend to the normal business of government which includes repairing roads and bridges, restoring schools and sustaining hospitals, supporting farmers and small businesses, and strengthening critical infrastructure.

At the same time, it must be noted that the impact of the hurricane has reduced our revenue, as economic activity slowed in certain sectors. That creates a fiscal gap that we cannot ignore. As a responsible Government, we must now take measured steps to close that gap — and that will include new revenue measures.

We could choose to finance the entire deficit through borrowing. But Jamaica has already travelled that path with negative outcomes. We have lived through the debt trap before — decades of high debt, high interest payments, and limited fiscal space. Over the last several years, through discipline and shared sacrifice, we have reduced our debt and restored credibility. We will not recklessly undo that progress. Borrowing will play a role, but it must be strategic — directed toward capital investments that build resilience and expand our productive capacity: infrastructure, agriculture, logistics, digital systems. In other words, borrowing to build assets that grow GDP and strengthen our ability to repay. As far as possible, recurrent expenses must be financed by taxation revenue.

Let me also assure you that equity is central to our approach. We are reviewing anomalies in the tax system and ensuring that the burden is shared fairly. The most vulnerable will be protected. The measures will be calibrated, balanced, and sensitive to the realities facing households and businesses. This approach will safeguard Jamaica’s stability, preserve our hard-won fiscal gains, and finance our recovery in a way that is sustainable and just.

Above all, this is about the next generation. The choices we make today will determine whether our children inherit a country weighed down by unsustainable debt, or one strengthened by resilience, discipline, and opportunity. Responsible governance requires that we think beyond the present moment. It requires that we rebuild not just for today, but for tomorrow. And that is the commitment guiding this Budget.

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