Cummings and Burke

WESTERN BUREAU:IN THE aftermath of the Government's announcement of a $21.8 billion tax package to take effect on New Year's Day, business interests in the west are describing the move to tax some basic food items and fuel as irresponsible and fear the increases will cause a growth in the underground economies.

President of the Jamaica Hotel and Tourist Association (JHTA), Wayne Cummings, said the fact that basic food items are often consumed by lower-end earners, whom he says have always had to bear the brunt of the tax burden, has proven that the Government has lost sight of the true fiscal position of the economy.

no fair grasp

"The issues, as regards the increase in the tax on fuel, surcharges that were just already increased, is irresponsible and shows that the Government, although we know they are in a crisis, do not have a fair grasp on the true fiscal position of the country," Cummings said. "We realise the kind of inflationary pressure will definitely affect us and everybody else I know of, no matter what you buy, no matter what you do," he added.

Cummings believes that the Government has reneged on its promise to broaden to the tax net, as he believes other avenues, that have yet to be considered, should have been explored to alleviate some of the pressures on the Pay As You Earn (PAYE) workers. He is also of the view that a tax package of this nature will fuel the growing informal economies.

"The promised levelling of the playing field between a full reduction in the indirect (payroll) taxes and balancing of that with the direct taxes has not materialised, it's all about how much more they can tax the people within the tax net instead of trying to find ways of increasing the tax net with all the people who we know are out there," Cummings said.

"This is going to, in my mind, fuel the underground economy more than it has ever before."

General manager of the Starfish Resort in Trelawny, Richard Burke, said he was more concerned about the impact of the taxes on his 350 staff members than the actual impact on his resort. He suggested that the Government should focus its attention on luxury items that are being imported and which are not vital to survival, rather than taxing basic necessities.

rock and a hard place

Both Burke and Cummings agreed with the suggestion of opposition spokesman on finance, Omar Davies, that the Government should start looking towards those who earn large profits from their investments on government papers.

"We are between a rock and a hard place and the funds will have to come from somewhere, and to some degree the comments made by Omar Davies as to why there is no tax on government papers might be relevant. Why are the people who are not in the productive sector but are rolling over money not affected? Why are there no taxation in those areas where people are making super profits," Burke questioned.