A DECREASE in revenue from production and international trade has so far been the knockout punch that has hit Government's tax targets to the canvas.

Both areas have underperformed by $13.1 billion.

Local general consumption tax is off by $3.9 billion and special consumption tax is off by $1.5 billion.

Jamaicans have been warned by Prime Minister Bruce Golding to brace for new taxes "almost immediately" after the country inks an agreement with the International Monetary Fund (IMF).

Golding told the nation on Sunday that new taxes were needed to plug the hole in the $561-billion Budget, which has so far seen revenue underperforming by $17.8 billion.

Could be announced today

It was not immediately clear what new taxes the Golding administration intends to impose. The Gleaner has been told that such measures could be announced as early as today when the prime minister addresses Parliament on the details of the proposed arrangement with the IMF.

But already, Golding is being warned to avoid increasing or widening consumption taxes.

The youth arm of the Opposition People's National Party has said that it has seen information which suggests that the Golding administration is considering more consumption taxes.

"We have reason to believe that Prime Minister Golding is planning to impose taxes on basic food items, to remove the cap on the ad valorem component of the gas tax, as well as to delay the increase in the income-tax threshold," People's National Party's Youth Organisation President (PNPYO) Damion Crawford said yesterday.

Yesterday, however, a release from the Inland Revenue Department (IRD) stated that taxpayers were being reminded that the new income-tax threshold of $441,168 takes effect on January 1.

"The increase in the threshold will see individuals benefiting from a tax-free income of $441,168 annually, which translates to $36,764 monthly, $16,968 fortnightly and $8,484 weekly," the IRD said.

Areas of fallout

Yesterday, the PNPYO president told The Gleaner that his association was mindful that there were areas of greater fallout than consumption taxes, and urged Government to put forward solutions that would not severely impact ordinary Jamaicans.

"We think that Government should think about taxing bank profits, and we also urge them to consider increasing the tax on the dividends of the holders of government paper," Crawford said.

Golding said on Sunday that the burden of the new taxes would be appropriately spread.

Meanwhile, Michael Williams, general secretary of the National Democratic Movement, has said the party is not convinced Golding needs to raise taxes.

"I don't agree with the prime minister that we need new taxes at this time. I think that there is a lot of waste in Government that he should address before he comes to us about new taxes," Williams said.

He added: "This Government has not demonstrated a capacity to conserve, and now they are coming to us about new taxes. They can't be real; that approach is unfair."

daraine.luton@gleanerjm.com