- The Government’s tax ‘giveback’ package of $14 billion, as outlined by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, in the 2019/20 Budget Debate in the House on March 7, continues to generate positive feedback, particularly within the business community.
- This and other targeted deliverables are fuelling heightened expectations among several business leaders of further economic strengthening over the medium term.
- They are of the view that the prospects for Jamaica generating higher levels of sustainable growth are increasingly realistic and attainable, as evidenced by the consistently positive out-turns recorded under key fiscal benchmark indicators.
The Government’s tax ‘giveback’ package of $14 billion, as outlined by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, in the 2019/20 Budget Debate in the House on March 7, continues to generate positive feedback, particularly within the business community.
This and other targeted deliverables are fuelling heightened expectations among several business leaders of further economic strengthening over the medium term.
They are of the view that the prospects for Jamaica generating higher levels of sustainable growth are increasingly realistic and attainable, as evidenced by the consistently positive out-turns recorded under key fiscal benchmark indicators.
Small Business Association of Jamaica (SBAJ) President, Hugh Johnson, describes the Administration’s budgetary focus as a “move in the right direction”. particularly in relation to provisions for micro, small and medium-sized enterprises (MSMEs).
He welcomes the approximately $1.8 billion in earmarked loans, and the proposed Sidecar Fund Facility to be developed with Inter-American Development Bank (IDB) input to provide another $200 million in equity financing to very early stage scalable investment-ready start-ups.
Mr. Johnson believes these, coupled with the proposed increase in the General Consumption Tax (GCT) threshold from $3 million to $10 million, effective April 1, 2019, that will exempt micro and some small businesses from compulsory GCT registration and filing, will provide MSMEs with greater latitude to consolidate and grow their operations.
“We think that what has been announced [is] a step in the right direction. We commend the Minister for this… because we have been calling for these actions for many years. We are happy that somebody was listening,” he tells JIS News.
Consequently, Mr. Johnson says he is “very optimistic” about Jamaica’s future economic prospects.
“I think it’s a good start, and if we are really serious about ‘five in four’ [five per cent growth in four years], support to MSMEs is where we need to put focus on,” he adds.
As such, the SBAJ President urges MSME stakeholders to take advantage of and capitalise on the opportunities afforded them, by taking steps to formalise their operations where needed, and instituting sound corporate governance frameworks that will position them to tap into the resources being provided, to scale up their ventures.
“When a Minister [moves] to support the sector, it is only fitting that we show that we can step up to the plate and deliver what is expected of us,” Mr. Johnson says.
He points out that while there are additional inputs which MSME stakeholders would like to see materialise, “we are grateful for [the provisions announced this year], and we want to capitalise on them and just move the growth process forward”.
For his part, Jamaica Manufacturers and Exporters’ Association (JMEA) President, Metry Seaga, also welcomes the budgetary provisions, declaring that, “to say we are thrilled would be an understatement”.
“I believe that this Budget is, by far, the most progressive one for growth and development that I have ever seen presented,” he tells JIS News.
Mr. Seaga argues that its provisions “speak to the fact that the Government is listening to what we are saying and pursuing measures that are growth-inducing, and we are thrilled beyond belief.”
Key among these, he points out, are the increased allocation for national security; abolition of the Minimum Business Tax, and Asset Tax; revisions to the Students’ Loan Bureau’s lending structure; the increased General Consumption Tax threshold; provisions for MSME low interest loans; replacement of all ad valorem stamp duty payable on any instrument, with a flat rate of $5,000 per document; and reduction of stamp duty on property sales from five to two per cent.
These, the JMEA President contends, are “very positive and growth-inducin”,” adding that “we couldn’t be happier”.
In this regard, Mr. Seaga encourages well-thinking Jamaicans to rally their support behind the Administration, adding that “we want the people of Jamaica to start thinking in a more growth-inducing manner”.
“I absolutely feel that a new day has dawned in Jamaica, and I am very bullish on the country’s future,” he adds.
Meanwhile, Jamaica Employers Federation (JEF) President, David Wan, describes the Budget as “very positive and stimulative” for the economy.
He also cites MSME low interest rate loan provisions; the increased GCT threshold; reduction in the transfer tax of real estate sales; and the $14 billion in taxes being given up, among the Budget’s most notable aspects.
“It is obvious that it is intended to stimulate the economy, because the Administration is giving $14 billion, which will stay in the pockets of businesses and consumers. So, that and the other areas I mentioned are some of those that stood out for me,” the President tells JIS News.
Mr. Wan says based on these and the improving economic indicators, the JEF’s membership is “very optimistic about the future prospects for Jamaica’s economy”.