Falling Oil Prices Bad for Government – King

Head of the Department of Economics at the University of the West Indies, Dr. Damien King, says the recent collapse of oil prices is good for the economy but bad for the government.

Dr. King says the reduction will have an effect on the import tax revenue which he says will be lower.

Dr. King says the government will have to find creative ways of making up for taxes being lost.

He’s suggesting an increase in petrol tax.

In 2011, the Bruce Golding Administration had announced an increase in the ad valorem tax on fuel from 10-percent to 15-percent.

That decision prompted the then Opposition PNP to threaten islandwide protests, but the tax was rolled back to 10 per cent.

As global oil prices hit record lows, consumers in Jamaica are finally seeing a decrease in the price of petrol and a reduction in their light bills.

But Dr. King says as things now stand, avoiding the obvious decision of increasing the tax on fuel could have more serious effects on the country.