Double-tax mess
Published:Friday | July 29, 2011 | 12:00 AM
- Energy experts say Gov't must revisit policy to unburden JPS customers
Daraine Luton, Senior Staff Reporter
THE GOVERNMENT's tax policy is being blamed in part for the high electricity bills with which many consumers are faced and stakeholders, including the Jamaica Public Service Company (JPS), say Finance Minister Audley Shaw could relieve the pressure with one stroke of his pen.
"It is a serious discussion that somebody will have to take on," Damian Obiglio, JPS president and CEO, said during a Gleaner Editors' Forum at the newspaper's North Street, central Kingston, offices yesterday.
William Saunders, former head of the Wigton Wind Farm and past managing director of the Petroleum Corporation of Jamaica (PCJ), had accused the Government of double taxation in the provision of electricity to some customers.
"The JPS, included in their bills for diesel, is a tax that goes to the Government. The tax on the diesel is the same tax that you pay when you purchase diesel oil. The Government, in addition to that, gives you GCT (general consumption tax) on top of it, so they are taxing a tax," Saunders said.
$9b in taxes
He estimated that this double taxation is yielding close to $9 billion in taxes for the Government, and suggested that the administration revisits the tax policy.
"If the Government were to get rid of that, it would make an immediate impact," Saunders said.
The former PCJ boss, said a way must now be found to reduce electricity bills.
"The problem has to be addressed in an immediate time frame because the manufacturers are suffering, agriculture is suffering, everybody is suffering," he said.
Pointing to the estimated $9 billion in tax revenues which the Government now collects from the customers of the JPS, Saunders said: "I don't know if the Government is going to give that up, but if you bring LNG (liquefied natural gas) you would have to give that up."
Obiglio, who nodded in approval while Saunders spoke on the taxation issue, looked toward Minister of Energy and Mining Clive Mullings and said: "There are some tax issues, minister."
The JPS CEO said: "It is true. Everything you (Saunders) say regarding tax. Tax over tax (is what) the customers are paying."
Obiglio noted that more than 50 per cent of customers do not pay GCT on electricity because they consume less than 200 kwh per month.
"But the ones who pay, they pay," he stressed. "We bill it and the people know if they don't pay we disconnect. The Government receives the money, but it is true that in the case of the diesel oil there is a case of double taxation."
The Government, in April, dismissed a call from the Opposition for the 10 per cent GCT on electricity bills to be rolled back.
Shaw imposed the measure for consumption over 200 kilowatt-hours per month.
When he addressed the issue in April, the finance minister said 375,823, or 74 per cent, of JPS customers do not pay GCT on electricity. He also urged Jamaicans to conserve on electricity.
"Turn off the light bulbs, use energy-saving bulbs, turn on the water heater 15 minutes before you need it," he said, in highlighting some conservation measures.