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CCRP Concerned PSOJ's Tax Reform Proposal; Insensitive To Needs of Vulnerable Groups

Kingston, Jamaica, March 6, 2012: The Caribbean Community of Retired Persons is concerned that several aspects of the Private Sector Organization of Jamaica’s (PSOJ’s) Tax Reform Proposal would have a detrimental effect on the poor, the elderly and those who are retired.

The PSOJ’s detailed response to the government’s 2011 Green Paper on Tax Reform was produced by a working group including over 20 business associations, plus an alliance representing 35 others. It was submitted to the Taxation Committee of Parliament on February 15, 2012. Its contents have been posted on the PSOJ’s website.

A committee of concerned CCRP Directors and members met on March 6 to examine the PSOJ Tax Reform Proposal. The group concluded that “The Proposal is not placing enough emphasis, or taking into consideration, the impact of its recommendations on the most vulnerable, the pensioners and those persons of no measurable or fixed incomes”.

Specifically, the CCRP is concerned about the following PSOJ recommendations:

  1. There is no mention of an increase to the existing $80,000 p.a. tax free ceiling for pension income; it has been in effect since 2010 and should be substantially increased.
  2. The allowance of $80,000 p.a. for persons over 65 has also been constant for some time but no increase is mentioned. This should also be increased, to a realistic livable income.
  3. The tax exemption limit of $499,200: this threshold is too low and should also be substantially increased in view of the rising cost of living and the fact that many must care for their elderly relations.
  4. Following on the previous point, CCRP feels there should be no GCT on basic food items. This tax is skewed against the elderly when you consider that the majority of them have no pension whatsoever, and limited means of earning.
  5. The property tax increase should be increased gradually instead of the single massive increase proposed by the PSOJ Working Group.
  6. The CCRP feels strongly that there should be no tax on dividends.  Dividends are declared after all taxes are paid by the listed companies, and many seniors have invested in these shares to provide for their future. To revert to taxing dividends would be double taxation.

In addition to the concerns listed above, the CCRP Committee felt that the PSOJ Working Group’s proposed reduction of GCT from 17.5% to 12.5% would be unrealistic.  They recommend instead, an interim reduction to 15% to start with and a subsequent study of the implications for any future reduction.

The Caribbean Community of Retired Persons was launched in April 2010, with the mission of “working to ensure that the vast talent, experience and wisdom of our seniors will be respected, and that they enjoy the quality of life which they so richly deserve.”

With over 600 members from across Jamaica, the organization continues to be extremely proactive in serving as a vital resource for retired persons, as well as for those preparing for retirement.

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