FINANCE AND the Public Service Minister Audley Shaw's controversial comment yesterday on his administration's imposition of a special consumption tax on petrol at the rate of $8.75 cents per litre drew a chorus of condemnation from Opposition members.

In closing the 2009/2010 Budget Debate, Shaw said: "But should we miss this opportunity now of widening our tax net, and stop fighting over a few dollars on gas and a little margin here and a little margin there?"

However, Shaw's attempts at continuing his presentation were overwhelmed by shouts of "shame on you" by Opposition members.

Members of the parliamentary Opposition castigated the finance minister for trivialising the tax measure, calling for a retraction of his pronouncement.

Shaw later continued his contribution without responding to the Opposition's outburst.

Commenting on a recommendation by his Opposition counterpart to increase taxes on government bonds from 25 per cent to 33-and-a-third per cent and reduce the tax on fuel, Shaw said the move could spell trouble for investor confidence.

Destructive to investor faith

Dr Omar Davies last week suggested that the Government could reduce the special consumption tax on petrol by introducing the proposal.

"Such a tax would be destructive to investor confidence and would amount to changing the rules in the middle of the game," Shaw declared.

Meanwhile, Shaw tried to remove any misunderstanding on the Government's plans to tax personal allowances, explaining that the agreements reached under the public sector memorandum of understanding (MOU) would remain intact. This, according to Shaw, meant that allowances under the MOU would not be taxed.

Housing allowance not taxed

The finance minister also sought to assure the police that the administration would not tax their housing allowance. However, there was nothing to indicate this position in the revised revenue measures.

On the issue of the consolidation of payroll taxes, the finance minister said during this fiscal year the Government would impose a progressive rate of contribution on the National Insurance Scheme. "People who earn more will pay more, and in particular, the groups earning above $5 million," Shaw added.

edmond.campbell@gleanerjm.com