Today the Government of Jamaica (GOJ) presented its plan to Parliament to fund the 2021/22 National Expenditure Budget of JMD 830.78 billion. In his Budget Speech, Dr. the Honourable Nigel Clarke, Minister of Finance and the Public Service outlined how this expenditure would be financed. With 2020/21 Revenue Estimates projected JMD 807.32 billion, Minister proposed ‘NO NEW TAXES’’ to fund the shortfall, instead preferring to avail of the fiscal space provided by a one-off dividend coming from the Bank of Jamaica of JMD 33 billion.
The Minister acknowledged the devastating impact that the COVID-19 pandemic has had on Jamaica including the loss of 450 Jamaicans to the virus to date. He also noted that the Planning Institute of Jamaica (PIOJ) expects the Jamaican economy to contract by 12% in 2020/21 with a 70% contraction of the tourism sector.
Notwithstanding a projected JMD 70 billion decline in revenues for 2021/22 as a result of the economic fall-out, Minister Clarke acknowledged that now would not be the right time to burden the economy with additional taxes. No doubt he heeded the advice of the late British Prime Minister Winston Churchill who had noted that “ … for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
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