Kingston, Jamaica -- May 6, 2008 -- Prime Minister, Bruce Golding, has given the assurance that government is working towards having a new and institutionalized tax regime for Jamaica in place by the start of the 2009/10 fiscal year next April.

Speaking at the official opening of the Jamaica Manufacturers Association (JMA)/Jamaica Exporters Association (JEA) Expo 2008 at the National Arena in Kingston on May 1, Mr. Golding said the administration had hoped to complete a review of tax reform proposals received for the introduction of the new regime on April 1 this year, but deferred on this after realizing that they had "a considerable amount of work left to be done."

"Apart from that, we felt that this year was so turbulent that perhaps, it would not be a fortuitous time to introduce a completely new tax regime that people would have to take time to get accustomed to and, bearing in mind that whenever you introduce far reaching tax changes, you can never be absolutely sure what the immediate impact on the revenues will be. Therefore, we needed more time to work on it, and we intend to introduce that programme for the beginning of the next fiscal year," the Prime Minister stated.

Alluding to his Budget Debate presentation on tax incentives in Parliament in April, Mr. Golding said that the need to grant a plethora of waivers, exemptions, and concessions, as well as the small percentage of companies and individuals paying corporate, company, and personal income taxes, suggests that there is a problem with the country's tax system, adding that it "speaks loudly to us about the kind of work that has to be done."

The Prime Minister noted that while there were sectors that needed priority attention and special support in terms of tax concessions, government would not be able to rationalize the tax system or extend waivers "unless we are able to induce, urge, (and) coerce, those persons who are not paying (taxes) to come in and pick up their share of the burden."

He pointed out that only one per cent of registered businesses pay 75 per cent of the company taxes collected, 75 per cent account for half of one per cent of corporate taxes paid, and 246,000 individuals, representing 94 per cent, paid income taxes. In addition, 4,000 persons, who are not a part of the Pay As You Earn (PAYE) structure, account for the remaining six per cent of income tax payments.

"There are many persons, people in business, people in professions, who are getting away without shouldering their fair share of the burden. Therefore.compliance is (going to be) a big part of our revenue collection programme (this year) and we are doing it in preparation for the institutionalized system of tax compliance that will have to be a part of the new tax structure that will be introduced in April of next year," Mr. Golding informed.