By Andrew Green, Staff Reporter 
Evans, Gregory and Ross
TO BALANCE its books, the government is most likely to focus on increasing taxes now, say analysts interviewed by Wednesday Business.
There are several options open to the government, and in the longer term, these may be implemented. But for now, the easiest option is to boost the tax take.
Economist Dr. Omri Evans, speaking during an interview with Wednesday Business, said, "There is little room to manoeuvre. The cost of maintaining the policies on the fiscal side will be substantial, given the rising debt."
Macro-economic stability has been attained, with inflation falling and exchange rates relatively stable, although interest rates remain higher than those of our main trading partners, he said. But maintaining the exchange rate regime is costly, Dr. Evans said. It is sustained by heavy external borrowing, high interest rates and high taxes to pay the interest cost of the loans.
"I would not be surprised if there was an increase in taxes," said Sterling Asset Management Company chief executive Charles Ross. He said Finance and Planning Minister Dr. Omar Davies was quoted as saying there would be no increase in taxes before the elections.
"We all know the situation regarding the country's debt, fiscal deficit and current account balance," Mr. Ross said. But he says that no major policy shifts are expected.
Economist Errol Gregory expects there to be some policy shifts, which is why he believes Dr. Davies has announced that he will be holding meetings with various groups across the island.
"The question is how to cut government spending and generate growth," Mr. Gregory said. "Difficult decisions are ahead." Tighter budgeting methods, as suggested by economist Gladstone Bonnick, is one mechanism to control spending, Mr. Gregory said. Corruption and waste in government will also have to be reduced.
But even though "Jamaicans are heavily taxed," Mr. Gregory said, "this is the time the government might look at some new areas of taxation."
He said one tax Jamaicans might become now become a lot more familiar with is the property tax.
In addition, Minister Davies has announced that extra effort will be made to collect taxes from the informal sector.
Jamaica Manufacturers Association president Clarence Clarke, said the Minister of Finance and Planning has to ensure that interest rates and government spending are cut to stimulate growth. For Jamaica to compete globally, or even in domestic markets, Mr. Clarke said, "we need to put our house in order."
