Funding of tax cuts must be explained in debate, says Hyman

By: Edmond Campbell

Image caption: Economist Ralston Hyman.

As the second national political team debate focusing on the economy gets under way tonight, economist Ralston Hyman wants both the ruling Jamaica Labour Party (JLP) and the People’s National Party (PNP) to explain to the country how they plan to give up significant revenues through tax breaks without imposing new taxes on Jamaicans or making large cuts in the capital budget.

At the same time, senior economist Dr Peter-John Gordon wants members of both political parties to highlight their plans to grow the economy faster than it has over the past 50 years. The parties should also discuss their plans to expand productivity, he said.

In unveiling its election manifesto on Sunday, the JLP pledged to cut income tax to 15 per cent of annual earnings on a phased basis if it remains in power, while the PNP said it would raise the personal income tax threshold, allowing persons earning up to $3.5 million annually to pay zero per cent income tax.

The debate begins tonight at 9:00 with Finance Minister Fayval Williams, Dr Dana Morris Dixon and Dr Christopher Tufton of the governing JLP facing off with Opposition Spokesman on Finance Julian Robinson, Peter Bunting and Kisha Anderson of the PNP.

The tax breaks were announced by the JLP at its mass rally in Montego Bay and the PNP’s at another mass rally in Mandeville on Sunday.

“The second thing they need to tell the country is, if we did it twice and it never worked, why are we doing it again?” Hyman said.

He said the $1.5-million income tax threshold introduced in 2016 by the JLP administration resulted in $32 billion in taxes and there was no meaningful economic growth.

Hyman further pointed out that former Finance Minister Dr Nigel Clarke increased the annual personal income tax threshold, effective April 1, 2024, from $1.5 million to $1.7 million for persons subject to PAYE or self-employed, but the “economy still a struggle”.

With the high cost of energy that makes Jamaica’s manufacturing sector uncompetitive, Hyman wants the debaters to tell the country what their respective parties will do in relation to the country’s energy policy.

“In terms of productivity, we have full employment yet the economy has a flat line. What is it that they are going to do to increase productivity, so that the economy can benefit from the lowest level of unemployment in history?” the economist questioned.

He is also urging the political representatives to discuss how they intend to deal with the massive trade deficit that Jamaica continues to run. “What is going to be the national export policy? We continue to import four times the amount that we export.”

Hyman is also expecting the participants in the debate to highlight their strategies to develop new sectors to reduce the country’s reliance on remittances that are expected to decline, based on the policies being pursued by US President Donald Trump.

Join the Discussion