$29Bn Tax Package to Help Stave-off Melissa-Related Damage to Fiscal Position

  • Following the catastrophic impact of Hurricane Melissa, which caused over US$8.8Bn in damages, the Government of Jamaica has proposed several tax adjustments to fund reconstruction and bridge the fiscal gap.
  • To bolster the national budget and address public health, the Government will introduce a Special Consumption Tax (SCT) of $0.02 per ml on sweetened beverages, projected to generate $10.1Bn. Simultaneously, the tax net is being modernised to include international digital services and intangibles, such as streaming platforms and online software, bringing these globally consumed services under the local GCT framework.
  • To preserve tax value and curb harmful consumption, the SCT on Alcohol will increase from $1,230 to $1,400 per Litre of Pure Alcohol (LPA), and the tax on Cigarettes will rise by $3.00 per stick (moving to $20.00 total).
  • The Environmental Protection Levy (EPL) will increase from 0.5% to 0.8%, and the domestic tax base will be expanded to cover 100% of local sales to bolster climate resilience. It was first imposed on all goods imported, but later extended to the domestic market.
  • The GCT rate for Tourism will be hiked from 10% to the standard 15% (effective April 2027). Furthermore, the 20% duty concession for public officials will be modified, requiring them to pay GCT on imported motor vehicles.
  • To safeguard fiscal stability during the ongoing economic recovery, the Government has committed to extending the $11.4Bn annual transfer from the National Housing Trust (NHT). This budgetary support will now continue for an additional five-year term, securing essential revenue through 2031.
  • The implementation of these new revenue measures is projected to generate $29.44Bn in revenues for the FY 2026/2027 fiscal year. As these measures normalise within the economy, the government anticipates a sustained revenue contribution of $15.60Bn for the 2027/2028 cycle. This two-year revenue stream is a critical part of the government's strategy to maintain fiscal discipline while funding essential infrastructure projects.

(Source: Ministry of Finance)