THE JAMAICA Employers Federation (JEF) is outraged at the Government's proposal to introduce GCT on health premiums to be applied to new policies effective June 1 this year, and on renewal date of existing policies, states Jamaica Employers' Federation president Herbert Lewis.
This coming after the Parliamentary Tax Committee's (PTC) recommendation was submitted on Wednesday, September 11, he said.
Jamaican employers are faced with the tremendous task of remaining profitable in the current local and international economic recession. Prosperity and success is often times hampered by the increase in expenditure for the execution of daily operations.
Jamaican companies have to take into consideration escalating utility costs as well as many other operating costs. The Jamaican economic climate is such that employers never know what to expect and the latest of these developments is GCT on health insurance which will severely affect companies' expenses.
The additional taxation if approved will increase overheads for employers who provide insurance for employees.
"The Government has to find an alternative way to widen the GCT net in an effort to raise $8.16 billion because employers are already burdened as is. This taxation will be totally unbearable as it means an additional $600m payment for employers and employees," said JEF executive director Mrs. Jacqueline Coke-Lloyd.
BURDENED
In addition to the proposed taxation of health insurance, employers are being asked to pay increased NIS to support the National Health Fund (NHF), she said. The impact of underinsurance on any economy is a very frightening situation as this will automatically promote unwholesome and stressful lifestyles.
These lifestyles will have the damaging effect of increased health costs for the public health sector which then becomes a burden for the government and the economy by extension.
The Government might very well benefit in the short run from the implementation of taxing health insurance at the detriment of creating an unhealthy, unwholesome, unproductive and strained workforce.
"As things now stand legitimate employers and employees are being taxed excessively which is very difficult for the employer. If these conditions persist health insurance will become unaffordable for employers and employees and benefits could be dramatically reduced or completely abandoned. Over 600,000 Jamaicans will be affected by this proposed tax," lamented Mr. Herbert Lewis, President of the Jamaica Employers' Federation.
UNDERINSURANCE
This proposed tax could result in underinsurance which will have the negative impact of an unhealthy workforce. An unhealthy workforce spells burden on the public health sector.
For every action there is an equal reaction, continued Mr. Lewis.
Mr. Lewis is imploring the PTC to revisit their proposals as investors could become wary of investing in a country where taxation can be applied without adequate research of the impact on the human capital and employment providers of the country.
The JEF is also strongly opposing the proposed increase of income tax on investment premiums.
"The proposal of income tax on investment premiums needs also to be revisited. We cannot accept another fallout in the financial and insurance sectors. This will lead to further unemployment and an increase in antisocial behaviour," stated Mr. Lewis.
