Eric Crawford: Jamaica's tax system in synch with regional partners. - File

WITH THE Government signalling the imminent introduction of new tax measures to reverse falling revenues, tax expert Eric Crawford says an increase in General Consumption Tax (GCT) should not be ruled out.

The Government's proposed implementation of new taxes will follow the signing of a standby agreement with the International Monetary Fund (IMF).

Officials from the IMF are now in the country to conclude ongoing talks and possibly sign an agreement with the Golding administration.

Discussing Government's tax options with Crawford in a Gleaner interview yesterday, the PricewaterhouseCoopers partner said a GCT hike was an obvious possibility.

Jamaicans pay 16.5 per cent for GCT, with a number of basic food items exempted from the consumption tax.

Making it clear he was not recommending tax measures, Crawford said the Government had, in recent times, removed tax on dividends and reduced transfer tax on shares and land.

Asked whether Jamaica was overtaxed when compared with other developing states, Crawford said it was not out of line with countries in the region, and at the island's stage of development.

The tax specialist said, when compared with developed countries, Jamaica's tax rate was not particularly high.

"The Scandinavian countries have very high tax rates as a percentage of GDP," he said.

Jamaica not overtaxed

According to Crawford, the inefficient application of taxes in Jamaica had fuelled the perception that the country was overtaxed.

"I believe that is why people in Jamaica feel like we are very heavily taxed, because we still have to pay for a lot of the services that we should take for granted, even at the level of taxes that we are paying now," he pointed out.

He said countries like the United Kingdom and Canada, which are highly taxed, provide first-rate health services and other social support.

edmond.campbell@gleanerjm.com