Wehby points to a 2007 study by the Inter-American Development Bank, which estimates that tax exemptions and incentives have eroded half of the economy's tax base.
Outgrown usefulness
He further argues that while tax incentives were used successfully to promote investment and stimulate growth during the 1950s and 1960s, they have outgrown their usefulness today. The hotel sector, he discloses, is the largest beneficiary of incentives, with a few in the manufacturing sector.
Wehby argues, in a Sunday Gleaner article, that over time, there has been an accumulation of incentive schemes which have been used to compensate for shortcomings in the macroeconomic system, instead of addressing the fundamentals.
"Going forward, we must have a comprehensive understanding of the existing incentives, quantify their costs and quantify their macroeconomic impact, including revenue, public debt, investment and growth," states Wehby.
In advocating tax reform, Wehby notes that in the latest Doing Business report, Jamaica ranks ninth among countries where it is most difficult to pay one's taxes due to various tax types, payment dates and tax rates. He adds that it is "inequitable that the PAYE (Pay As You Earn) taxpayers continue to bear the brunt of the tax burden".