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Wednesday, April 28, 1999 Published at 09:29 GMT 10:29 UK

World: Americas

Jamaica rethinks petrol tax

The army was deployed to help clear burning roadblocks

The Jamaican Government has announced a substantial cut in a special tax on fuel which provoked riots in which nine people died after its introduction two weeks ago.

The BBC's Carol Orr in Jamaica: The nation listened to and watched the prime minister for an hour
Flights and cruises to the Caribbean island, which relies heavily on tourism, were cancelled following the rioting.

In an address broadcast live on local television, the Jamaican Prime Minister, PJ Patterson said the 30% tax would be reduced by half from tomorrow.

"The events of last week served to remind us any solution we devise as a government cannot succeed without the understanding and the involvement of the people," he told parliament.

"Some lessons are hard for all of us," he said as he announced what is being described by correspondents as an uncharacteristic climb down.

The prime minister said that to compensate, the government would tax interest on stocks and shares instead.

Move praised

The move has been praised by church leaders and trade unions, who say the government is shifting the burden from the poor to those better able to afford it.

[ image: The opposition had threatened further protests]
The opposition had threatened further protests
The government was seeking to raise millions of dollars to pour into roads and public transport.

Protests against the tax which increased the price of petrol for motorists from 41 cents per litre to 53 cents caused the virtual shutdown of the island with roadblocks and the looting of shops and offices.

The BBC's Carol Orr says the partial U-turn was made after suggestions from a task force set up by the prime minister and is likely to end speculation that demonstrations on the island might resume.

Challenging the reduction, however, the opposition Jamaica Labour Party pointed out that the price cuts per litre were not as much as claimed but amounted to an average of 44%.

With high interest rates and rising unemployment the introduction of the special consumption tax on fuel two weeks ago prompted a furious reaction from demonstrators.

Several shops were looted and a number of businesses burnt in three days of violent protests.

Gun battles erupted between police and protesters as flaming barricades shut down traffic on the streets of Kingston and other towns.

Schools and businesses closed, public transport ground to a halt and foreign airlines suspended flights to the island. Hundreds of people were arrested.

The last two Jamaican Governments to significantly raise fuel prices collapsed, and deadly fuel price riots took place in 1979 and 1985.

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