JMA head warns Gov't against big GCT cuts
Published:Friday | May 13, 2011 | 12:00 AM
Edmond Campbell, Senior Staff Reporter
PRESIDENT OF the Jamaica Manufacturers' Association (JMA), Omar Azan, has sounded a note of caution to the Government as it proposes a five or 2.5 percentage point reduction in the general consumption tax (GCT) on January 1, 2012.
A Green Paper on Tax Reforms, tabled in Parliament on Wednesday, proposed that the GCT should be reduced from 17.5 per cent to 12.5 per cent or 15 per cent.
However, Azan told The Gleaner that while he supported the move to cut GCT, it should be done on a gradual basis.
"We are in support of the reduction of GCT, but not immediately to 12.5 per cent," he said.
The JMA head suggested that GCT should be reduced over a three-year period.
"What we are afraid of is that revenue may not be had and then you are going to have to go back and increase it again, so we will prefer to see a gradual decrease of the GCT," he added.
opposed to some taxes
Azan also pointed out that manufacturers were opposed to taxes on capital equipment and raw material.
"There is no way you can tax a manufacturer who is borrowing money at these high rates to buy machinery and equipment," he said.
He said the JMA supported the reduction of statutory corporate income tax and an increase in the income-tax threshold which now stands at $441,168 per annum.
Azan made it clear that the JMA had not signed off on the recommendations contained in the Green Paper but had submitted proposals of its own.