The Evolution of Jamaicaâ€™s Tax Burden
This study reviews four tax incidence studies, done in Jamaica since 1983, to determine the evolution of Jamaicaâ€™s tax burden. It identifies several limitations in the methodologies used that make it difficult to interpret the results without due care. For example, income bases were different, adjustment for evasion was not always satisfactory due to data limitations, and several nontax institutional features of the economy did not inform the incidence assumptions. The general conclusions are twofold: the overall tax burden has declined since 1983, and the degree of progressivity in the distribution of tax burdens increased over time. Several factors account for the change in progressivity. First, increases in the standard deduction have removed many low-income households from the direct tax net. Second, the removal of several allowances has increased the burden on high-income earners. Third, perhaps surprisingly, the indirect tax burden has tended to be proportional or even slightly progressive.
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