With a society like Jamaica that has a large informal economy, a progressive tax burden falls largely on a limited group of wage earners – mainly on public sector middle-income earners.
CAPRI launched, on November 13, 2018, a study which proposes recommendations for the government to consider shifting the tax structure from taxing income to taxing consumer spending. The study was conducted in partnership with NIA and USAID. The event, which attracted a large audience, was held at the Spanish Court Hotel’s Worthington property.
“The main objective of a tax system is to generate sufficient revenue to finance public sector activities in a non-inflationary way as through taxes, a state receives the necessary funding to perform its functions and duties effectively,” explained Dr Damien King, Executive Director of CAPRI and main presenter of the evening. Dr. King was joined on the panel by Mrs Pamella Folkes, Deputy Financial Secretary, Taxation Division - Ministry of Finance and the Public Service; Mr Hank Williams, Deputy Commissioner General, Strategic Services - Tax Administration Jamaica; and Ms Allison Peart, Country Managing Partner and Tax Partner - Ernst & Young to discuss the research findings and recommendations.
Throughout the presentation, King highlighted that, “A well structured system is difficult to evade, easy for taxpayers to comply with, and cheap to administer, while raising enough revenue for the government’s priorities. In the same light, poorly structured tax systems can be costly, affect economic decision making, and harm economies”.