Poor J’cans want help!

IMF urges Gov’t to in­crease, ex­pand PATH

Jamaica Gleaner - - NEWS - Jo­van John­son Staff Re­porter jo­van.john­son@glean­erjm.com

MORE POOR and vul­ner­a­ble Ja­maicans are in need of greater wel­fare as­sis­tance from the Govern­ment to re­duce the im­pact from the fall­out linked to the con­tro­ver­sial tax break, the In­ter­na­tional Mone­tary Fund (IMF) has said.

The IMF is­sued the dec­la­ra­tion yes­ter­day as its board ap­proved the 13th re­view of the Ja­maica’s pro­gramme with the Fund, paving the way of the dis­burse­ment of J$5 bil­lion to Ja­maica.

But as it af­firmed that the im­ple­men­ta­tion of the eco­nomic re­form pro­gramme re­mains on track, the Wash­ing­ton-based fi­nan­cial in­sti­tu­tion said there are risks to the pro­gramme and there is a need to “bol­ster so­cial spend­ing”.

On that, the IMF said it is “im­per­a­tive” that the Govern­ment for­tify the so­cial safety net, which means strength­en­ing the Pro­gramme of Ad­vance­ment Through Health and Ed­u­ca­tion (PATH) – the ad­min­is­tra­tion’s main so­cial pro­gramme which en­tails con­di­tional cash trans­fers.

TAX RE­FORM

The IMF said this strength­en­ing and widen­ing the cov­er­age of PATH is “ur­gent, par­tic­u­larly as the on­go­ing tax re­form to re­bal­ance from di­rect to in­di­rect taxes is ce­mented. More gen­er­ally, with one-fifth of Ja­maica’s pop­u­la­tion cur­rently liv­ing in poverty, the pro­gramme needs a sig­nif­i­cant boost”.

In doc­u­ments re­leased yes­ter­day, the IMF said the Govern­ment is “ex­am­in­ing the scope for in­creas­ing the level of ben­e­fits in the short run, and putting in place a medium-term plan for im­prov­ing cov­er­age and lower self-ex­clu­sion”.

Ac­cord­ing to the Fund, “ex­pen­di­tures on PATH to­tal about 0.3 per cent of GDP – rel­a­tively low in the re­gion. While the pro­gramme tar­gets the pop­u­la­tion groups where its im­pact is great­est (preg­nant and lac­tat­ing women, chil­dren, dis­abled adults, and the el­derly), both the cov­er­age and the level of PATH ben­e­fits should be in­creased.

“For in­stance, in the bot­tom decile (poor­est in pop­u­la­tion), only 58 per cent live in a house­hold that re­ceives PATH ben­e­fits. Cov­er­age is es­pe­cially weak among the dis­abled; only 10 per cent of them in the bot­tom decile are PATH re­cip­i­ents. For fam­i­lies re­ceiv­ing ben­e­fits, those lev­els are also low – less than five per cent of house­hold ex­pen­di­tures in the bot­tom decile”

Ef­fec­tive July, the per­sonal in­come tax thresh­old in­creased from $592,800 to $1,000,272. It will move to $1.5 mil­lion next year April at a cost of $16 bil­lion, or 0.9 per cent of GDP.

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