THE GOVERNMENT'S problem in finding cash to pay its bills seems to be getting worse as more and more ministries and departments join the delinquent ranks. The latest is the Ministry of National Security, which is now some half billion dollars in arrears in payments to suppliers to the police, the army and the Correctional Services. If these suppliers feel forced to cut off future supplies, it will obviously affect the efficiency and morale of the security forces at a time when they are under pressure, in trying to bring crime under control. On the one hand, the need for funding is growing and on the other, the government's projected sources of revenue are shrinking.
Dr. Omar Davies, in imposing a 15 per cent tax on lottery winnings, expected to rake in some $250 million in extra revenue but the tax has drastically depressed the sales of Supreme Ventures and the Jamaica Lottery Company games to the point where this source of fund is drying up. None of the announced tax measures since the last budget seem to have been properly thought out by the experts in the Ministry of Finance. This has resulted in a see-sawing of policy, which does not inspire confidence in the business and financial communities.
In yet another move to compensate for lost revenues and to help reduce the fiscal deficit in the last quarter of this financial year, legislation has been tabled in Parliament to remove tax concessions currently enjoyed by most public sector companies including inter alia, the Bank of Jamaica, the Airports Authority, the National Water Commission and the Urban Development Corporation. These entities will now have to pay stamp duty, income tax, property tax and other levies with which private sector companies are burdened.
The move is estimated to provide government with an additional $600 million in additional revenue and we support it in principle. It will allow for better monitoring of the operational efficiencies of public companies although, in the case of Air Jamaica and the Water Commission, we suspect that it will create further cash flow problems for these already loss-making ventures. They will then require more government loans, which will be a case of taking from Peter to pay Paul, juggling which eventually has to be paid for by the Jamaican taxpayer.
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
