The International Monetary Fund (IMF) has again described the Jamaican Government's new tax relief plan, presented in the FY2016/17 budget as a bold step to shift the tax system from direct to indirect taxation.
But it noted that proper execution of this reform is critical to ensure revenue neutrality and safeguard the revenue base.
The IMF says it is also mindful of the effects of the policy on the poor suggesting that the Government strengthen and better target benefits such as PATH to help mitigate the impact of the reform on the poor.
However, the fund is still not satisfied with the government's efforts to reduce the wage bill saying concrete reforms are needed to reduce it as it continues to crowd out priority social and infrastructure spending.
It called for quick action to divest and outsource certain government services and implement the human resource management system.
The IMF statement comes after its Board, on Friday, completed the Eleventh and Twelfth Reviews under the Extended Fund Facility for Jamaica.
This resulted in Jamaica getting a US$80 million disbursement.
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