Some details contained in this article have changed. On December 17, 2009, the Government of Jamaica announced a range of new taxes to further close the fiscal deficit. See full details here ■

- Audley Shaw is beginning his budget presentation to Parliament.

- Our problems are not all external, corruption and inefficiency have been made here in Jamaica.

- "When we should have been growing, we borrowed. Now, we find ourselves with scarce resources and massive debt burden".

- "Debt management, tax reform, corruption have moved from endemic to epidemic proportions".

- The recession and weather developments in 2008 contributed to a contraction of 0.6% in the Jamaica economy.

- "Financial system remains strong and well capitalised".

- The budget assumes that recession will not recover until the second quarter of 2010 + that commodity prices remain depressed.

- Assumptions based on IMF report of yesterday which says that global economy will contract for first time since WW.

- Real GDP decline to 3.5%, remittances have slowed, inflation is expected to be in the range of 11-14%.

- Jamaica economy has a number of fundamental structural weaknesses – hurt by crisis but not caused by it. Weaknesses include large fiscal deficits and consequently one of the largest debts in the world.

- Tax reform is an essential element of national development strategy. Goal is to ensure JA has a competitive tax system.

- Established forensic data intelligence mining unit to identify self employed persons; tax administration will put the spotlight on tax cheats.

- 200,000 who should be on the tax roll are off and not paying taxes – Shaw invites them to start now. No questions will be asked about prior years of noncompliance for tax cheats. This amnesty programme will run until Oct 2009. If tax cheats do not register before this time they will be liable to pay all owed taxes.

- Shaw threatens to come for corrupt IRD and customs workers, and says some have already been arrested.

- Public accountability protectorate re-established after being closed in 1991 by the previous government. This office will have the responsibility of investigating the entire government service of Jamaica.

- Reports of JDF and JCF patrolling some areas as speech is ongoing

- PATH programme, education and community development to be pursued as part of expanding the social safety net. Education funding will expand to 13% of GDP.

- $106 billion for capital investment projects for central government and government agencies including the National Housing Trust.

- Central gov targeting fiscal deficit of JA $65.4 billion.

- Tourism declined by 1.1%, remittances down by 16.6%, bauxite earned $4.4b last year, down from an expected $8.5b. This has contributed to a tremendous fall off in revenue. Just over $100 million in revenue is expected in the bauxite and aluminum industry this year (down from average of at least $5 Billion).

- Fiscal gap of just over $18bn. This will be met by an increase in taxes on fuel, expanding on GCT base, increase of minimum tax threshold. Shaw says fuel will still be below most Caribbean islands in price of fuel. He says, in fact, that Jamaica is third in the region for lowest price of fuel behind the US and Trinidad & Tobago.

- Portion of increase on fuel will go towards road maintenance fund – will not all go towards budget. This will repair roads damaged by hurricanes as far back as 2004, and roads badly in need of repair under former government. This year road maintenance will be allocated 20% of fuel tax, next year 35%, following year 50%.

- There will be an oversight board to monitor use of funds.Various stakeholders, including taxi assns, transport authority etc

- “In addition to road maintennance fund to fix the roads of Jamaica it is now ‘give back time’ to PAYE workers”. Minimum income tax threshold has been doubled from $220,000 to $440,000 by January 2010. On July 1 2009, it will be first adjusted to $320,000 then will move to $440,000 in January 2010. This comes at an annualised cost of $12bn to government and will see 85,000 persons no longer paying income tax in Jamaica, this – combined with those under the old threshold – amounts to 132,000 PAYE workers no longer paying income tax.

- Transfer tax now 4%, stamp duty will be moved downwards to 3%. This reduces costs in real estate investment.

- GCT on telephone instruments up to 20%. Narrowing range of items that are exempt from GCT (like VAT, at 16.5%) will yield $7.5bn. These items include salt, rolled oats, live birds, fish and printed material. Opposition member with responsibility for finance Omar Davies, speaking after the session, says he needs to see a more complete list of items that will now be taxed, in order to assess the impact on Jamaicans’ cost of living. These items will be taxed from April 27th.

- Petrol tax now $8.75 per litre. And there will be an increase on petroleum products from 2-5%. Estimated revenue yield is $13.328bn. Effective 27th April.

- Shaw ends with bible verse Isa. 8:12: “Your ancient ruins shall be rebuilt; you shall raise up the foundations of many generations;you shall be called the repairer of the breach, the restorer of streets to live in”.

- Before the reading of the bible verse was even complete, reports are that a section of Red Hills Road has been blocked (GoJamaica). TVJ news at 7 said however that these reports were unfounded.

- ** House adjourned. Opposition will reply on April 28th. We will attempt to live blog again on that date. Consider subscribing to this blog.

Download entire budget speech

Antillean · Bridgetown, Barbados

The Antillean is a pan-Caribbean nonprofit media outlet, covering news, features and opinions on social issues in the Caribbean region and the wider Americas. Our mission is to encourage conversation on, and enhance the visibility of, social currencies within the hemisphere – issues which are often underreported in the mainstream media.

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