Jamaica’s government plans to impose taxes on more goods such as phone calls in order to reduce the Caribbean nation’s debt, Finance Minister Peter Phillips told lawmakers.
“We are forced to consider every possible means of revenue,” Philips said in a speech to Parliament today. “In such a crisis as the one we presently face, things that we might never have considered as being taxable, had to be considered.”
The new taxes will boost government revenue by 8.2 percent this year and help restore a “trust deficit” with international lenders after Jamaica’s debt level almost doubled over the past four years, Phillips said.
The country’s debt amounted to 126 percent of gross domestic product in 2011, behind only Antigua & Barbuda and St. Kitts & Nevis in the Caribbean, and compared with Greece’s 165 percent, according to the International Monetary Fund. The $13 billion economy, expected to grow 1 percent this year, risks a “fragile” recovery unless the government can reduce debt, the IMF said in March.
The government hopes to reach an accord with the IMF by the end of the year after a $1.27 billion stand-by credit agreement fell apart in 2011, costing Jamaica access to $306 million in loans, Phillips told lawmakers today.
Exemptions will be made to protect the poor against the new tax measures, such as not taxing text books approved by the Ministry of Education, Phillips said.