NEW TAX MEASURES AS OUTLINED BY MINISTER SAHW ON DECEMBER 17, 2009

MINISTRY PAPER No. 128
Enhanced Revenue Measures for the balance of
FY200912010 and Medium Term

Members of this Honourable House are invited to take note of the following
additional revenue measures being proposed for implementation, effective January I,2010:

I, Increase in the Standard Rate DC General Consumption Tax
It is being proposed that the standard rate of General Consumption Tax (GeT) be increased from the current 16.5% to 17.5%.
The revenue yield from th is measure is estimated at $3.6 billion annually.

2. Expansion of the GeT Base
In an effort to broaden the tax base and reduce the level of distortions in the system, it is proposed that the list of exempt items be further reduced. Appendix

I represents the items that continue to be exempt. Appendix 2 represents items that have been removed from the exempt list and are now taxab le.
The revenue yield from th is measure is estimated at $6.2 bill ion annually.

3. Imposition of GCT on the supply of Elect r icity to re sidential premises
It is being proposed that GeT at the standard rate be applied as follows:
The supply of electricity provided to residential premises for private or domestic use above a threshold of 200 kilo watt hours of electricity per month . The supply of electricity of 200 kilo watt hours and below will be zero rated. The revenue yield from th is measure is estimated at $1.2 billion annually.

4. Adjustment to the SCT on Fuel
Currently unde r the GeT Act fuel attracts both a specific and an advalorem rate of Special Consumption Tax . It is now proposed that an advalorem rate of 15% be applied as follows:

(a) Where the fuel is manufactured in Jamaica, the 15% will be applied to the ex refinery price inclusive ofthe Specific component of the SCT.

(b) Where the fuel is imported into Jamaica the Advalorem rate will be
applied to the value as prescribed in the GeT Act.

The items to be affected include:
Motor Spirits including EIO/87, EIO/90
Automotive Diesel Oil
Kerosene (Excluding Turbo Jet At Fuel)
Marine Diesel Oil and The estimated yield for the measure is $9.4 billion annually.

5. Increase in the Special Consumpt ion Tax (SCT) on Cigarettes.
It is being proposed that cigarettes oftariff#2402.20 and 2402.9010 be increased from the current $8,500 per 1,000 sticks to $10,500 per 1,000 sticks. The expected revenue yield from th is measu re will be $1.41 billion with 20% of this amount to be remitted to the National Health Fund.

Audley Shaw, M.P
Minister of Finance and the Public Service
December / -7 , 2009

SUMMARY OF ENHANCED REVENUE MEASURES
SBillion (annualized)
I. Increase in the Standard Rate ofGeT 3.6
2. Expansion of the GCT Base 6.2
3. Removal of the Exempt GCT Status of Electricity 1.2
4. Re-iotroduction of the Ad Valorem Component of the SCT 9.4
5. Increase in scr on Cigarettes 1.41 I
Total Revenue Measures 521 .81
3
I.
2.
3.
4.
5.
6.
7.
8.
9.
10.
a)
b)
c)
II.
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Appendix 1
The new schedule of Exemptions under Parts I & 2
of the Third Schedule to the GCT Aet Goods
Travel tickets for international travel.
Milk excluding condensed milk, powdered skimmed milk, flavoured milk, mi1k based products and milk substitutes.
Infant formulae
Rice
Cereal flour known as counter flour
School uniforms only
Drugs specified in the Fourth Schedule (List Four Drugs) to the Food and Drugs
Regulation, 1975.
Contraceptive devices and substances.
Artificia l breathi ng apparatus for individuals afflicted with respi ratory disorder.
Printed matter (excluding newspapers, magazines, periodicals and journals}
and materials classified under TariffHeadings Nos. 49.01 to 49.05 such asbrochures, pamphlets and leaflets for religious purposes and books and booklets; children's picture books and painting books;
maps and hydrographic charts and similar charts of all kinds, including atlases, wall maps and topographical plans, print ed globes (terrestrial or celestial).
Statio nery and educational apparatus and equipment (including those used for games and physical training) which are for use by any educational institu tion approved by the Minister and which are intended solely for educational purposes as certified by the responsible officer ofsuch educational institution.

12. Stationery (including writing paper), printed forms, envelopes and blotting paper for use in an examination which are purchased in Jamaica or imported therein by or on behalf of the Cambridge Local Examination Committee. the Caribbean Examination Council or any other examination body recognized by the Minister responsible for education for which there is a cert ificate signed by the Secretary of the respective body verifying the use for which the stationery, forms, envelopes
and paper are intended.

13. Exercise books specified under Tariff Sub-H eading No. 4820.2 0 of the First Schedule to the Customs Tariff(Revision ) Resolution, 1972.

14. Parcels whose value (excl usive of customs duty and postage) does not exceed such amount under Item No.52 of the Second Schedule to the Customs Tariff
(Revision) Resolution. 1972.
IS. Duty Free Passengers' baggage and household effec ts as described in and to the extent allowed under Items No.6 and 6A of Part I of the Second Schedu le to the Customs Tari ff (Rev ision) Resolution. 1972. (Returning Jamaican Resident)

16. Gold bullion, coins and bank can currency notes imported by the Bank of
Jamaica.

17. Unused postage, revenue and other stamps, postmarks and franked envelopes,letters and cards imported by the Postmaster-General.

18. Goods (except motor vehicles) acquired by or on behalf of the Boys Scouts or Girls Guides Associations of Jamaica or any other youth organization or association approved by the Minister which the Commissioner of Inland Revenue is satisfied are necessary for the rendering of their services .

19. Altar bread, matzos unleavened bread, communion wafers and altar wine purchased or imported for the purpose of administering the sacraments which the head of the denomination for which they are intended declares in writing will be used only for the purpose intended.

20. Candles, myrrh and frankincense which the Commissioner of Inland Revenue is satisfied are purchased or imported solely for use in places of divine worship.

21. Diagnostic reagents used for the testing of dextrose in the blood and glucose, protein, ketones and pH in the urine.

Services
22. Transportation of people within Jamaica, except tour services rendered by tour operators.

23. The rental of residential property used for residential purposes only.
24. Public postal and telegraph services.
25. Services rendered by a charitable corporation or charitab le association, or service clubs or a home for the aged approved by the Minister.
26. Medical , dental, nursing and optical services and services provided pursuant to the Professions Supplementary to Medicine Act.
27. Services performed under a contract the payment for which is by a foreign government or a multilaterallcnding agency.
28. The'supply of electricity to commercial and industrial customers .
29. The supply ofwater (excluding bottled water) to the public.
30. Services rendered by the Jamaican Branch of the Red Cross Society.
31. Services rendered by the S1. John's Ambulance Brigade.
32. Services rendered by the Boy Scouts and Girl Guides Association of Jamaica and any other youth organization or associat ion approved by the Minister.
33. Services rendered under a contract ofhealth insurance.
34. Services rendered under a contract oflife insurance.
35. Services rendered in relation to the Betting, Gaming and Lotteries Act.
36. The following services (excluding catering services) rendered at a port or
international airport in Jamaica:
loading or unloading of aircraft or vessel
port and harbour services
docking, berthing and mooring
conservancy
aircraft landing
parking and housing
apron services
airport navigation services
Ministry of Finance and the Public Service
December 17, 2009
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37.
38.
39.
36 .
Food produced exclusively for the feeding programme of a school approved by the Minister responsible for education which is not for resa le to the general public.
The provision of education or training in an educational institution approved by the Minister responsible for education.
Services rendered by Legal Aid Clinics and under the Poor Prisoners Defence
Act.

The follow ing financia l se rvicesa)
the exchange of money;
b) the payment or collection of a cheque;
c) the issue of a letter of credit, traveller' s cheque, bank cheque, postal note, cash
card, credit card or money order;
d) the issue, allotm ent, drawing, acceptance, endorsement, transfer of ownership,
or payment of a debt security;
e) the issue, allotment, or transfer of ownership of an equity secu rity or a
participatory security;
f) underwri ting or sub-underwriting the issue of an equity security. debt security,
or participatory security;
g) the provision of credit under a cred it contract;
h) the assignment of any hire-purchase agreement;
i) the provision of a guarantee. indemnity. security , or bond in respect of the
performance of obligations under a cheque, credit contract, equity security.
debt sec urity. or participatory security. or in respect of the acti vities specified
in paragraphs (b) to (h);
j) the provision or transfer of ownership. of a life assurance contract or the
provision ofre-insuranc e in respect of any such contract;
k) the provision or transfer of ownership of an interest in a superannuation
scheme;
1) the provision or assignment clef a futures contract throu gh a futures
exchange;
n) the payment of divid ends and interest.
The exempt ion shall not apply to -
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a) any commission earned by a salesman in the life insurance ind ustry who is selfemployed
or is employed as an independent contractor; or
b) the following -
(i) services rendered by an accountant or attorney-at-law; or
(ii) fees or commission charged in respect of the services specified m subparagraphs
(a) 10(n) of paragraph (1).
Ministry of Finance and the Public Service
December 17. 2009

Appendix 2
Items deleted from Parts 1 & 2 of Third Schedule to the GeT Act
and arc now su bj ect to GeT.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
II.
12.
13.
14.
IS.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Raw foodstuff as follows (
a) fresh fruit and vegetables
(b) ground provision
(c) legumes
(d) onions and garlic
(e) meat
(I) poultry
(g) fish. crustacean or mullosc
Cornmeal
Corned beef.
Pick led mackerel, herring, shad and dried salted fish.
Canned sard ines, herrings and mackerel.
Bread. buns, bullas, biscuits and crackers.
Sugar
Salt.
Eggs.
Patties
Rolled oats.
Baking fleur
Any live bird, fish, crustacean, mollusc or any other animal of a kind generally
used as or yielding or producing food for human consumption and draught
animals.
Unprocessed agric ultural produce, including produce from stock fanning, fresh
water fish fanning, forestry cultivation and horticulture supplied directly at the
farm gate.
Cooking Oil.
Syrup
Fish, cock and noodle soups
Animal feeds
Surgica l gloves, including disposable, ste rile and those made of latex rubber.
Condensed and powdered skimmed milk
Com.
Soya Meal
Wheat.
Fishing apparatus, gear, boats and engine, equipment and parts.
Motor spirit and lubricating oil (that were usually sold to fishermen).
Sanitary towe ls and tampons
Solar water heaters
Photosensitive semiconductor devices, including photovoltaic cells whether or not
assembled in modules or made up into panels.
Disposable diapers for the incontinent.
Ministry of Finance and the Public Service
December 17, 2009
30. Orthopaedic appliances, surgical belts, trusses, spl ints and other fracture
appliances, artificial limbs, eyes, teeth and other artificial parts of the body,
hearing aids, other appliances which are worn or carried or implanted in the body
to compensate for any bodi ly defect or disabi lity, canes, and crutches designed for
use by the handicapped and eye glasses and contact lens used for the treatment of
correction of a defec t in vision on the written prescription of an eye-care
professional. Parts and accessories for any of the items specified in this paragraph.
31. Invalid carriages.
32. Medical and surgical prostheses including surgical implants and ileostomy,
colostomy and similar abilit ies designed to be worn by human beings.
33. Printed matter and materials classified under Tariff Headings Nos. 49.01 to ~9.05
excepting:
a) brochures, pamphlets and leaflets for religious purposes;
b) books and booklets (excluding magaz ines, newspaper, periodicals and
journals);
c) children's picture books and painting books;
d) maps and hydrographic charts and similar charts of all kinds, including atlases,
wall maps and topographical plans, printed globes (terrestrial or celestial).
35. Sports' equipment (including cloth ing).
36. Furnishing or decorating a place of worship or as vestments for use during public
worship.
Services
The following operations -
37. the construction, alterat ion, repair, extension, demolition or dismantling of any building or
structure, including offshore installations, that is to say, installation which are maintained
or are intended to be established for underwater exploitation;
37. the construction. alterat ion, repair, extens ion or demolition of any works forming or
intended to form, part of the land, including (without prejudice to the generality of the
foregoing) walls, roads works . poweriincs, telegraphic-lines, aircraft runways, docks and
harbours. railways, inland waterways. pipelines, reservoirs, water-mains, wells, irrigation
works, sewers, industrial plant and installation for purposes of land drainage, coast
protection ondefence; .
38. operations which form an integral part of, or are preparatory to, or are for rendering
complete, such operations as site clearance. earth moving, excavation, tunneling or boring
laying of foundations, erections of scaffolding, site restoration. land-scaping and the
provision of roadways and other access works;
39. Activities for which an admission fee is charged by any cultural or other organization.
40. The supply of electricity to residential premises.
41. The supply of sewerage disposal services.
42. The rearing of animals or the growing of crops under the contract for reward.
43. Services rendered by an undertaker in relation to burial or cremation including the supply
of coffin .