When Government Senator Keith Duncan told the Senate on Friday that environmental protection levy receipts are not earmarked for environmental work, he confirmed what the levy’s design has implied since 2007. The money goes into the Consolidated Fund. Duncan maintained that environmental spending happens anyway, just without a formal link to the levy.

That position is legally sound and fiscally defensible. It is also the soft spot in the Government’s case for the higher rate that takes effect on October 1.

The levy was introduced in the 2007/08 revenue measures at 0.5% of the CIF value of imports, and extended in 2015 to locally manufactured goods, charged on 75% of the selling price. Throughout, it rested on provisional collection orders. Finance Minister Fayval Williams said this week’s Act replaces orders that had expired, giving the levy firm legal footing. Opposition Leader Mark Golding argued that collections over the years lacked legal authority and sought a validation clause, which Williams rejected. 

The rate now rises to 0.85%, with about J$3.6 billion in added revenue projected for this fiscal year. Williams tied the increase to climate vulnerability and fiscal pressure. The first half of that rationale invites an obvious question about how much of the money reaches environmental programmes. Opposition Senator Ramon Small-Ferguson asked for figures on collections to date and on spending on environmental projects. None were reported from the debate. 

The argument for ring-fencing is about trust. Peter Edwards, in a Gleaner commentary in February, noted that levies in Jamaica and abroad often send proceeds straight into general revenue with no visible tie to outcomes, and that his own research found visitors backed levies when the earmarking was transparent. A charge titled “environmental protection” that funds general spending gives critics an easy line, and Small-Ferguson used it: if this is simply revenue, he said, the Government should say so. 

The argument against is not trivial. Earmarking commits revenue to one purpose whether or not that purpose is the priority in a given year, and public finance bodies including the IMF have long cautioned that it fragments budgets. Jamaica has already chosen that side once. In 2017 the Government moved the Tourism Enhancement Fund, financed by a US$20 fee on arriving air passengers, from self-financing into the budget over objections from the Jamaica Hotel and Tourist Association. The fees now flow to the Consolidated Fund, and the TEF receives an annual allocation.

That arrangement suggests a middle route. The Government need not wall off EPL receipts to answer Small-Ferguson. It could publish, each year, what the levy collected, beside what was spent on waste management and climate resilience, and show whether the second figure covers the first.

Duncan says the environmental spending is already happening. Putting a number next to that claim would cost the Government little, and it would give the levy’s name some meaning when the higher rate reaches import bills and shelf prices on Thursday.