Minister of Finance and the Public Service, Hon. Audley Shaw, has outlined new revenue measures to raise $13.5 billion to finance the 2017/18 Budget.
This includes an increase in the Special Consumption Tax (SCT) on fuel to range from $0.43 to a $7.36 per litre.
This measure is expected to earn $7.5 billion and will take effect at the pumps as at March 15.
There will also be an increase in the SCT on alcoholic beverages from a single rate of $1,120 per litre of pure alcohol to a new rate of $1,230 per litre.
“This will gain $403 million and this will take effect on the 13th March,” the Finance Minister said, while opening the Budget Debate in the House of Representatives on Thursday (March 9).
The House is being asked to consider and approve an increase in the SCT charged per stick on tobacco and tobacco products, to $17 per stick from $14. The increase will be applicable to cigarettes, cigars, cigarillos and cheroots. It is expected that this revenue measure will yield some $826 million and will take effect on March 13.
The Government will also impose General Consumption Tax (GCT) on group health insurance and it is expected that this measure will yield approximately $1.88 billion. This new regime will be introduced on April 3, 2017.
Other measures include a reduction in the threshold for application of GCT on consumption of residential electricity from 350 kilowatt hours to 150 kilowatt hours per month.
This is expected to yield some $1.5 billion in revenue and will come into effect April 3. “The vast majority of the consumers of electricity are residential and are within that band of 150 or less,” Mr. Shaw pointed out.
There will also be an across-the-board increase of 20 per cent on motor-vehicle licences and allied fees, as a means to recover part of the cost to provide the goods and services to the motoring public.
This measure is expected to yield some $464 million and is to come into effect from March 13.
Other measures include reimposition of withholding tax on general insurance premiums paid by Jamaican residents to non-residents at a rate of 15 per cent. This is expected to yield some $0.99 billion and will become effective for the year of assessment ending December 2017.