Big Budget counterplan

The parliamentary opposition has outlined a raft of measures it says would spare taxpayers the $18 billion in new taxes announced by the Government for the 2026-2027 fiscal year.

The Opposition has also urged the administration not to extract the $11.4 billion from the National Housing Trust but instead use the money to address the critical housing needs of Jamaicans.

In his contribution to the 2026-2027 Budget Debate in the House of Representatives yesterday, Julian Robinson, opposition spokesman on finance, outlined several measures, including borrowing, that he said would ease the burden on Jamaicans, particularly those still struggling to recover from the impact of Hurricane Melissa.

The first proposal is the introduction of an electronic invoicing system for Tax Administration Jamaica that will generate $8.6 billion in taxes.

Robinson explained that under the current system, when businesses make sales, they are required to upload their transaction records for verification by the tax authority. He said the problem with that model is that the obligation to upload rests with the business, and slippages often occur.

As a result of this, Robinson said transactions can go unrecorded, uploads can be incomplete, and the gap between what was earned and the amount reported is not always caught.

He said case studies in Mexico, Uruguay, Peru, and Chile have shown marked increases in revenues after the introduction of an electronic invoicing system.

“Better data means better compliance, and better compliance means more revenue from the same tax rates without asking anyone to pay more than what they owe,” he said.

With a combined tax collection of $430.2 billion in general consumption tax and special consumption tax, Robinson said a conservative estimate of two per cent of that total would yield $8.6 billion.

“This is not new taxes. This is money that the Government is entitled to collect.”

Referencing a news item last month, Robinson said 11 used- car dealers were brought before the court for having liabilities amounting to $4 billion.

“It indicates that compliance with greater enforcement can fill the gap that we are looking to [fill] with new taxes,” he said.

DIGITAL NOMAD PROGRAMME

Another revenue initiative proposed by Robinson is the establishment of what he calls a digital nomad programme.

This involves the granting of a special legal permit allowing remote workers, freelancers, and entrepreneurs to live and work in Jamaica while employed by a company or clients based outside the country.

With four million tourists visiting the island annually, Robinson said Jamaica could target 5,000 visitors who would be required to pay a visa fee of US$2,000 per year. This, he said, would generate approximately $1.5 billion through a combination of direct visa revenue and increased indirect taxes from consumption.

He said digital nomads who stay in Barbados spend an average of US$55,000.

Robinson said if an average six-month stay in Jamaica could yield a spend of US$25,000, the country could realise the economic benefit of US$125 million (J$19.5 billion).

The opposition spokesman on finance also suggested targeted transfers of $1 billion each from the Bank of Jamaica and the Factories Corporation of Jamaica, public bodies with demonstrated surplus capacity.

On the expenditure side, the Opposition said it would reduce the $13-billion transfer from central government to the Airports Authority of Jamaica (AAJ) by $2 billion.

Robinson said $2 billion was earmarked for the construction of a new corporate head office. With the project at its planning stage, he said, deferring it to the next fiscal year frees up the sum that is more urgently needed elsewhere.

He said the Opposition’s alternative creates a revenue gap of approximately $17.6 billion, which would be offset by $2 billion in expenditure savings, leaving a net difference of $15.6 billion that would be financed through additional borrowing from the issuance of treasury bills.

Robinson said interest expense would increase by $0.94 billion owing to the additional borrowing.

“The additional borrowing would raise our projected debt-to-GDP ratio to approximately 66.14 per cent, up from the projected 65.7 per cent, a difference of 0.44 of one per cent,” he said.

edmond.campbell@gleanerjm.com