Spokesman on Finance Dr Omar Davies is cautioning the Government against
setting up what he claims are unrealistic fiscal targets and has stopped just
short of advising the administration to prepare for mass protests if a tax
package is announced this year.
“Regardless of any agreement
with any organisation, anywhere, there is no chance that any further taxation
can be tolerated by the population. The hardships are very real and there are
significant sections of the population which are hurting,” Davies declared
as he addressed the House of Representatives.
The opposition finance spokesman
was making his contribution to the 2010-2011 Budget Debate in Parliament, the
first since Jamaica re-entered a borrowing relationship with the International
Monetary Fund (IMF) in February.
The IMF has outlined the parameters
under which Jamaica’s economy must operate. Included among the requirements is
a directive to eliminate the budget deficit by 2013-2014.
However, Davies, who served the
country as finance minister for 14 years, claimed the past fiscal year was
characterised by chaotic tax packages and poor economic management under Finance
Minister Audley Shaw’s watch.
Pointing to the targets for fiscal
year 2009-2010, which began with a 5.5 per cent projection and was revised
twice to 10.9 per cent of GDP, Davies said the 6.5 per cent budget deficit
being projected for this year rings hollow.
“The minister needs to
indicate to us why the country should believe that he will be able to meet the
target this year when three targets in 2009-2010 were missed,” Davies
The constant revision of the
deficit targets last year was tied in with Government’s decision to introduce
three tax packages throughout the fiscal year as it struggled to fund its
Preliminary data out of the
ministry of finance indicates that, even with the tax packages, tax revenue
fell short of projection by $26 billion. Shaw had projected to earn $291.6
billion from taxes but raked in $265.8 billion.
This year, the finance minister is
projecting to earn $287 billion from taxes to finance his $503-billion Budget.
A fiery Davies told Parliament
yesterday that Shaw needed to explain “why there should be confidence that
we will be able to meet the target of $287 billion, given the clear evidence
that taxpayers are maxed out in terms of their disposable income”.