Increases on fuel and rise in property tax has caused double blow
The joint effect of recent tax increases on fuel and the surge in property tax announced in the 2017/18 budget has caused members of the Jamaica Gasoline Retailers Association (JGRA) to gear up for a double up shock.
If the government does decrease the additional special consumption tax of $5.67 per liter on 87 and 90 grades fuel which took effect recently, operators in the fuel retail trade would find it very difficult to remain in business. Based on 2013 valuations, the revised calculation of property taxes could see some owners paying a 1,000 per cent increase.
President Philip Chong said, "The impact is not there yet but we suspect it will come from both the property taxes and the increase from the fuel taxes. I would expect franchise fees and other things to go up and if we were to pass that on then fuel (prices) will go up additionally, much more than was expected."
With significant reductions in the property tax rates, the government has opted to adopt the 2013 Valuation Roll, moving from the higher rates of 1.5 per cent 2 per cent to the much lower range of rates between 0.8 per cent 1.3 per cent on the new valuation roll.
"We have to be careful of how we discount things in this economy because the dealer's margin is getting smaller and smaller and we are probably the only members of the industry that have not increased their margins year after year. We can't hold out much longer," Chong said.
Given the vital role of this revenue channel for the country's development, members were mindful of their responsibilities as good corporate citizens and so were not reluctant to paying taxes. Then again, fuel retail trade was already under siege and could not sustain any more shocks, as noted by Chong. PWKD11042017