Dr Clarke, who was opening the annual budget debate on the Appropriations Bill, said that the reduction would affect revenues to the tune of $14 billion.
However, he explained that it would allow for more disposable income in the economy, “…Allowing Jamaicans to keep more of their hard-earned pay in their pockets”, Clarke added.
The finance minister said, since the inception of the GCT some 30 years ago, this is the first cut in the rate without the imposition of new taxes.
The GCT cut is a part of $18 billion worth of tax cuts announced by the minister yesterday.
The finance minister also said the government will be reducing assets tax by 50 per cent from 0.25 per cent to 0.125 per cent.
At the same time, he announced a new income tax credit for businesses with up to $500 million in annual sales or revenues.
Clarke said that the potential for the revenue loss for the tax measures is expected to be $1 billion.
With Jamaica confirming its first COVID-19 case yesterday, the finance minister has earmarked $7 billion in contingency funding to tackle the COVID19 viral threat.
He said the money would be spent on procuring adequate medical and other supplies, as well as to improve the capacity of public-health facilities to handle existing caseload in the context of COVID-19; to prepare facilities for quarantine; to provide basic services for quarantined persons, and to fund the training of medical staff.
Clarke indicated that if the virus became more pervasive, the Government had resources to respond.
“We are prepared. We are in a much stronger position today to withstand global shocks than we have ever been before,” Clarke declared.
He said that the Government was providing an advance of $2 billion from the 2020-2021 Budget to facilitate immediate preventative and preparatory spending.
- Countries: Jamaica