THE EDITOR, Sir:
DR. OMAR Davies has said that with the increase in General Consumption Tax (GCT) from 15 per cent to 16.5 per cent the poor will not be significantly affected given that basic food items are exempt from GCT.
Based on the fact that the poor consume most, if not all, of their income, they too will certainly feel the full effects of the increase in GCT on other goods and services that they try to stretch their dollar to buy.
I note that the income tax threshold is being increased from $120,000 per annum to $169,104 per annum, effective July 1, 2005.
While many Jamaicans will receive a marginal relief because of this increase, the most indigent of them all will not receive a benefit, since generally their income falls below this threshold anyway.
An alternative to Dr. Davies' proposal would have been to increase the income tax rate to maybe 26 per cent.
This, along with his efforts to formalise the informal sector, would have no effect on the poor and at the same time would yield the desired revenue.
The minister may need to rethink his position with regards to the GCT or consider other social benefits for the persons living in the lower classes of our society.
I am, etc.,
KEMMEHI LOZER
35 Garfield Ave.,
Kingston 20
