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Taxing consumption in Jamaica

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  • Richard M. Bird
  • Kelly D. Edmiston

Abstract

In Jamaica, as in most countries, consumption taxes in the form of a value-added tax called the General Consumption Tax (GCT) and several excise taxes collectively known as the Special Consumption Tax (SCT) are critically important revenue sources, accounting for 37.4 percent of total revenues in fiscal year 2003/04 (27.7 percent for GCT alone) and an estimated 11.2 percent of GDP (8.3 percent for GCT alone). This paper first describes in some detail the present structure and administration of the GCT and SCT and then evaluates the performance of these taxes from several angles -- as revenue generators, with respect to their distributional effects and their relation to the shadow economic, their administrative aspect, and in international perspective. It concludes by setting out a number of recommendations for reform.

Suggested Citation

  • Richard M. Bird & Kelly D. Edmiston, 2006. "Taxing consumption in Jamaica," Community Affairs Research Working Paper 2006-01, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkcw:2006-01
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    References listed on IDEAS

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    1. M.C. Wassenaar & R.H.J.M. Gradus, 2004. "Contracting out: The Importance of a Solution for the VAT Distortion," CESifo Economic Studies, CESifo Group, vol. 50(2), pages 377-396.
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    3. Ms. Janet Gale Stotsky & Ms. Asegedech WoldeMariam, 2002. "Central American Tax Reform: Trends and Possibilities," IMF Working Papers 2002/227, International Monetary Fund.
    4. Kelly D. Edmiston & Richard M. Bird, 2004. "Taxing Consumption in Jamaica:The GCT and the SCT," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0432, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Keen, Michael & Mintz, Jack, 2004. "The optimal threshold for a value-added tax," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 559-576, March.
    6. Richard M. Bird, 2005. "Value-Added Taxes in Developing and Transitional Countries: Lessons and Questions (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0505, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Andrea Gebauer & Chang Woon Nam & Rüdiger Parsche, 2006. "VAT Evasion and Its Consequences for Macroeconomic Clearing in the EU," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(4), pages 462-487, February.
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    Cited by:

    1. Roy Bahl & Sally Wallace, 2007. "Comprehensive Tax Reform in Jamaica," Public Finance Review, , vol. 35(1), pages 4-25, January.
    2. Darío Rossignolo, 2022. "Gender Equity in Taxation in Latin America and the Caribbean," Asociación Argentina de Economía Política: Working Papers 4595, Asociación Argentina de Economía Política.
    3. Wayne Thirsk, 2008. "Tax Policy in Pakistan: An Assessment of Major Taxes and Options for Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0808, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. World Bank, 2012. "Jamaica : Poverty and Social Impacts of Fiscal Reforms," World Bank Publications - Reports 12755, The World Bank Group.
    5. Knobel, Alexander & Sinelnikov-Murylev, Sergey & Sokolov, Iliya, 2011. "Quality of VAT administration in OECD countries and Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 21(1), pages 16-34.

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    Keywords

    Jamaica; Value-added tax;

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