52 October 2016 - Business View Caribbean
BVM: Another priority is the “creation of a simple,
equitable, and competitive tax environment that will
ensure greater compliance and enhance growth.
Can you speak about the Ministry’s tax initiatives?
Williams
: “In any economy, the level of taxation and
how your taxes are structured will have an impact on
your economy. If you take too much tax from people,
they won’t have enough to spend and it will restrain
their growth. Our belief is in a lower tax environment
for the people of Jamaica. We believe that will spur
demand for goods and services which then puts busi-
ness in gear to produce those goods and services and
the result is economic growth. The rate of tax compli-
ance is, unfortunately, quite low. Currently, when you
look at our workforce, it’s about a million, point two.
But, of that, only three or four hundred thousand are
paying personal income taxes. So, that’s a small sliver
of the entire workforce. Over the years, we have seen
that the government tends to raise taxes but that just
drives compliance lower. So, this government, when it
was campaigning, said in no uncertain terms, that we
believe in lower taxes. We indicated to the electorate
that, upon taking office, we would engage in re-struc-
turing how our taxes are on the personal side by rais-
ing the threshold so that more of their income would
be shielded from taxes. Over the years, there have
been many tax reforms and, most recently in the last
government, there was an emphasis on corporate tax
reform. We’ve taken on personal income tax reform
and we’ve done that by increasing the threshold – the
level of income that does not get taxed.”
BVM: By increasing the personal income tax thresh-
old, do you run the risk of collecting less money to
run the government?
Williams
: “We had compensating measures, so it was
more a shift away from direct income taxes to more
indirect consumption taxes. And with the reform in the
corporate tax, companies that take advantage of the
reform measures that are available could have an ef-
