THE Government is looking at options for the creation of a new petroleum tax structure, according to Prime Minister PJ Patterson.

Patterson told Monday's post-Cabinet press briefing at Jamaica House that the ministries of finance and planning and commerce, science and technology are to complete ann analysis and finalise discussions, then present options for the Cabinet's consideration for the new tax structure.

He said that the ministries would also prepare a submission for Cabinet consideration aimed at encouraging the use of lower octane fuel and favouring a transition of the rolling stock to a more efficient transport fleet.

The Jamaica Information Service (JIS) will be charged with the responsibility to design a public education programme to introduce the idea of a revised tax regime for the sector.

Patterson told the briefing that the petrol tax regime needs critical examination and that the country has to "stop playing politics" with the issue. He said that the local tax structure does not reflect the current realities, particularly within Caricom.

"The tax level, fixed according to product type, is on the decline when compared to the increasing price of petroleum products. Most countries are using an ad valorem approach. We have to get a rational discussion at the national level on this issue," he said.

He said that the Cabinet had already accepted the principle of a new petroleum tax policy, as well as a predetermined amount of the proceeds from any increases on petroleum products being used to establish a dedicated road maintenance fund.
"When we look at the magnitude of what is going to be required to lift our arterial and parochial roads to the requisite standard and to maintain them, we are talking about billions of dollars which the national budget in its present form simply cannot afford," Patterson added.
He said that the country needed to have in place an adequate and reliable supply of energy for national development and there has to be an acceptable reserve margin.

There has to be an immediate decision on the expansion of the power generating capacity of the Jamaica Public Service Company (JPS) in order not to return to "the days of load shedding".

"We have to take a decision immediately about an increase in JPS capacity by 120 megawatts. We are looking at coal as the fuel source, giving due consideration to clean technologies which will mitigate negative environmental impact," he explained.

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