In Jamaica value-added tax takes two different forms; these are General Consumption Tax (GCT) and Special Consumption Tax (SCT) which consist of specific excise tax in the country in relation to the financial sector. The implementation of these tax systems occurred on October 22nd 1991 at a rate of 10%; replacing eight (8) different forms of taxation in the country, some of which are customs and entertainment duties. These value-added tax systems were implemented to reverse the deficit of the country and serve as a catalyst for economic growth. In an attempt to encourage the economic growth of Jamaica the tax system of GCT went under further reform in 1993, 1995 and 2003 in an aid to refine the tax system to better suit the country. It is in this regard that the reform of 1993 led to the removal of a number of zero-rated items to the exemption category and also raised the standard rate of the tax from 10% to 12.5%. It was in the 1995 reform that the standard rate of 12.5% was then raised to 15% inclusive of the addition of more items to the exemption list. According to Edimston an Economist at the University of Toronto, the increase in exempted items within the tax system and its reforms was to ensure that goods and service that were considered vital to lower income homes remained affordable for the lower class in the country(2010). In the 2003 reform, Jamaica removed some of the items from the list of exemptions because the increase in such items affect the revenue making capacity of the country thus resulting in substantive decreases in revenue. In addition, an increase of the rate of the items that were once zero-rated was also implemented. .It was after these reforms that GCT and SCT were seen as critical forms of revenue f...
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...cost levels to export items which as previously stated in turn resulted in the closure of businesses. As the value added tax of Jamaica went through much reforms to encourage possible change within the economy to raise governmental revenue, results from the implementation of the tax however, has added to the national deficit of the country with little to no recovery.
Works Cited
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Ministry Of Finance. 2013. White Paper on Tax Reform to Secure Adequate Revenues for the Future Bahamas.
Peters, A. Bristol, M. 2006. VAT Is It Suitable for the Caribbean Community.
Edimston, K. Bird, R. 2010. Taxing Consumption in Jamaica The GCT and SCT. University of Toronto.
Victor, P. 2010. VAT A Brief History Of Tax, Nassau Guardian. December 31, 2010
In this paper I covered the geography, lifestyle history, people, and the society. Many different people transformed the history and the culture they have today. The people in Jamaica live in small communities without very much to live off of. Their climate does not range very much and their seasons depend on rain. Although, there society is poor, the people still find ways to live their lives to the fullest.
The IMF representative in the clip claims that, “They needed to expand their exports and diminish their imports and the best way of doing that is to make foreign currency more expensive.” Whether done intentionally or not, the only economies that seemed to have prospered from this new relationship and reduced trade barriers are those countries that are already economically sufficient. Judging from the negative effects that befell Jamaica when it reduced its trade barriers, it could be concluded developed countries were looking for new markets to import their goods and set their eyes on Jamaica, a tiny country that they could easily intimidate into submission. In the video clip, vendors complained about the large amounts of foreign fruits and vegetables that were now in their market and stated that these imports were hurting their businesses. While local farmers are failing to find a market for their produce, foreign countries have found a market for their exports in the local supermarkets. As mentioned in the video clip, supermarkets seemed to be doing well with the overseas produce because they are being sold for less than the local produce. The reduction of trade barriers has introduced a new competitor to Jamaican markets that mirrors
Hall, A. (2001, August). The Flat Income Tax and the Fair Tax Consumption Tax: A
The economy has been declining, and in an effort to help, the U.S offered massive tax breaks to companies who were willing to relocate there, this brought booming business, until the mainland began struggling and cut this program in 1996,
Hoffman, et al. South-Western federal taxation: comprehensive volume. 2014 ed. Mason, OH: South-Western Cengage Learning, 2014.
Business Source Premier. Web. 19 Jan. 2014. Stokey, Nancy L., and Sergio Rebelo. "Growth Effects Of Flat-Rate Taxes." Journal Of Political
The international financial institutions set up strict conditions for the Jamaican government before issuing the loans. One of those conditions was to reduce trade barriers making it easier and cheap for economic super powers to import goods into the country. However, the integration of Jamaica into the global economy made them easy targets for manipulation by the global superpowers. The cheap and subsidized importations to the country negatively affected local businesses and resulted in increased unemployment, corruption, criminal activities and other vices. The public debt has kept on increasing and consuming more than half of government expenditure leading to insufficient funds to address these social
Modigliani & Miller applied their theories with two modules, one which doesn’t include the taxes and this is their first findings, and another one with taxes to make it more realistic.
The use of taxes is one of the government's favorite ways to make its presence known in the economy. While this method seems blatantly obvious, many of the ways the government uses the money collected by taxation is not. Some of the money it takes is used to fund other programs designed to "protect" consumers and to "create" jobs. Be...
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
The purpose of this paper is to illustrate the layout of taxation. I will differentiate the types of taxes and the roles that they serve currently. Subsequently, I will explain what equity, efficiency, effectiveness and transparency (EEET) are and show how they apply to taxation as a whole. Lastly, I will conclude how the EEET applies to the four tax types.
In addition to the loss in the subsidy Sri Lanka also charges a 28% corporate income tax on a business’s taxable income. Therefore falling costs and an increasing gross profit mean that SriLankan’s taxable income increases and therefore they will experience a greater tax reduction. Figure 11 outlines the impact of this tax on SriLankan.
The famous literature on principles of taxation was embodied in Adams Smith “Canons of taxation”. Since then, economies have adopted (and adapted where necessary) these basic principles for what is regarded as the most important tool of fiscal policy.
Jamaica's approximate 2.5 million bank customers enjoy the benefits of strong competition in a deregulated banking system. The dilemma is that we only get benefits from non-price competition while the real benefits of lower lending rates and higher deposit rates are nothing but a fleecing illusion to be pursued but never attained. Jamaica commenced moving from a regulated banking system to a more open competitive sector in the 1990s. While competition has affected many areas of the banking industry, there are two areas that illustrate this change more than others: marketing promotions and product choice. This competition however, has not brought about significant savings for customers due to the Oligopoly market conditions that exists, thus a much narrower choice of commercial banks are now available to the Jamaicans.
According to the ‘World Tourism Organization’ (UNWTO), the tourism industry is one of the fastest growing sectors in the world, as it is estimated that by the year 2020, 7.8 billion people (roughly a quarter of the world’s population) will embark on a foreign trip (Bennett & Gebhardt 15). The Caribbean is said to be the most economically dependent on this industry, as the ‘Caribbean Tourism Organisation’ states that the industry forms the “economic backbone of most countries in the Region”(“Caribbean Tourism Industry” 1), implications for what tourism’s affect on the region have arisen and have prompted further research into matter. Since the 1970’s research regarding tourism in the Caribbean has attempted to determine the social, cultural, environmental, and economic impacts of tourism. Much of the research has found that there are in fact many negative adverse affects, and Jackson’s article asserts that, “Governments often commit money and other resources to support the growth and development of tourism and often turn a blind eye to its negative impacts” (574). The reason why tourism looks attractive (and thus turn a blind eye) to these Caribbean countries is because of “its potential to foster GDP growth, to create employment, to increase foreign exchange earnings, and attract capital investment” (Daye, Chambers, and Roberts 2). This paper will overview such impacts by first discussing a case study conducted in Jamaican resort town, Ocho Rios, with Sheere Brooks discussing the observed social, cultural and economical consequences of Jamaica’s reliance on the tourism industry and will finally look at tourism in relation to capitalism, with Robert Fletcher suggesting in his article that the tourism industry (and more specifically...