Prime Minister P.J. Patterson announced adjustments to the cess which the Government imposed on light bills. The cess sparked harsh criticisms last week for what business leaders say was its inequity and complication. Below are some highlights of Mr. Patterson's statement, made at Jamaica House:
THE aim of the Government is to place Local Government on a sound financial footing so that the Parish Councils can effectively discharge the functions for which they are responsible. In order for this to happen, the Parish Councils must be able to generate the necessary revenue -- adequate, reliable and regular.
At the present time, property taxes is the main source of revenues. Parish Councils also secure two-thirds of the revenue from motor vehicle licences, which is devoted mainly to meet the cost of maintaining the parochial road network.
The Prime Minister quoted from Minister of Local Government Arnold Bertram's statement to the House on February 26. It said that the last adjustment to the property tax was in 1992, although the laws require an adjustment to these taxes at least every five years. This, he said, explained the disparity between the cost of the services and the revenue generated.
This situation is further compounded by the fact that money must be found to pay for street lights. Street lights are an integral part of the infrastructure for the service sector of the economy. Just think of the thousands of Jamaicans who each night access services from restaurants, cinemas, night clubs, call centres, banks and educational institutions.
There is also the increasing number of highways which must be lit in order for a rapidly growing motoring public to use them safely.
The existing level of collections does not allow the Local Authorities to pay for street lights within their respective parishes.
Since the announcement of the cess for street lighting the administration has taken note of the response among the national citizenry, several communities and business groups.
Our Members of Parliament and Councillors have reported on some of the suggestions they have received to provide adequate street lighting, improve the collection of taxes and ensure that the obligation to pay for the services we all desire is equitably shared.
Everyone knows of my consultative style, my preparedness to listen and willingness to make adjustments, wherever they appear justified.
As a result of this extensive dialogue and consultation, I have directed that appropriate legislation be drafted immediately to ensure that all payments of cess for street lights by property owners/persons in possession during the fiscal year be credited to their property tax account for that property. That is to say, whatever payments are made for the street lighting cess will reduce the tax obligation for the property in question.
The credit will apply to the property in respect of which the cess has been paid, but the maximum credited in respect of property tax will not exceed the annual amount of property tax paid in the fiscal year.
This benefit will accrue to the owners of the 670,000 parcels of land in Jamaica which are liable to pay property taxes.
One hundred and seventy-three thousand customers of the Jamaica Public Service Company are non-property owners. They are entitled to the lifeline benefit of a discounted cost of energy for the first 100 kilowatt hours.
Some 442,000 households who comprise 89 per cent of the customers of the JPSCo will pay an average of $37.00 per month for the cess.
I also recognise that there are tenants who are not legally responsible for the payment of Property Tax. Any benefit from this new scheme must be theirs rather than the property owners'.
Mr. Patterson announced a technical team to work on the modalities for implementation of the new scheme.
Let me make it clear, these benefits are based on the assumption that there will be immediate and substantial improvements in the rate of compliance for the payment of property taxes. We must have the revenues to improve local services. For our part, in order to improve compliance, the new legislation will also enable property owners to pay property taxes at approved collection agencies.
I will always respond to those persons and sectors who use peaceful and constructive methods to voice their opinions. The response of the Government demonstrates the extent to which we listen, and are prepared to act within reason. The outcome is a victory for dialogue. It is also a victory for good governance.
