IMF Monitoring How Govt will Recoup $2bn Lost from Lowering Property Taxes

The International Monetary Fund, IMF, says it expects to know by next month whether the government will have to cut spending to make up the $2-billion lost as a result of lower property tax rates.

Finance Minister, Audley Shaw, announced the lower rates in Parliament last week.

The government chopped the rates following intense public outcry as thousands of people saw their property taxes skyrocket due to the updated land valuations.

The big question is now – how will the government make up those $2-billion? And will it even need to?

The Finance Minister’s Chief Technical Advisor, Aubyn Hill, said in a recent interview on Business Access TV that the government will not need to fill that hole.

He believes increased compliance in other taxes will more than make up for the revenue shortfall.

However, IMF Mission Chief to Jamaica, Dr. Uma Ramakrishnan, says they’ll have to see whether those other taxes continue to over-perform before they can say if other measures may need to be taken.

Dr. Ramakrishnan says the final tax data for the last fiscal year will be available around mid-May, which is when they’ll be able to say whether the over-performance seems likely to continue.

The IMF Mission Chief was speaking via video conference from Washington DC this morning.

She was addressing local journalists at the IMF’s office at the Bank of Jamaica, in downtown, Kingston.

Her comments come as the IMF Board completed its first review of Jamaica’s performance under the Standby Arrangement, which Jamaica has passed.