From Income to Consumption Tax?: The Case of Jamaica

Roy Bahl () and Sally Wallace

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: In this paper, we analyze the case of developing a country that has been involved in a long-term comprehensive tax reform. One might argue that Jamaica is a good case study of the fiscal realities of moving from a conventional tax system to a flat tax system. However, through the reforms of the 1980s, 90s, and into 2005, the objective was not to implement a consumption tax. In two reforms in the 1980s-early 1990s, Jamaica adopted a flat rate income tax, and a single rate value added tax, in order to redress some problems that had grown up in the system and to plot the next step in comprehensive tax reform. The first question we raise is whether these changes in fact moved the tax system closer to a consumption tax. Again in 2005, Jamaica considered comprehensive tax reform. We raise the same question: would the full adoption of this proposed reform have moved Jamaica closer to a consumption tax? Finally, we ask the question of what remains to be done with the Jamaican tax system to convert it to a tax on consumption and whether it is a worthy goal in the case of a developing country.

Keywords: Income tax; Consumption Tax; Jamaica (search for similar items in EconPapers)
Pages: 35 pages
Date: 2006-12-01
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper0627

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