JIS News

Prime Minister the Hon. Bruce Golding stated Wednesday night (December 23) that the Government is seeking substantial reductions in both interest charges it pays on instruments held by the banks, as well as interest rates, in general.
Mr. Golding said in his national broadcast on tax measures being introduced by his Government, that these were compelling reasons not to impose a special tax on the commercial banks as suggested in some quarters.
The Prime Minister noted that a critical part of his administration’s strategy going forward is to reduce Government expenditure, and the biggest single item of Government expenditure was the cost of interest. This year alone, interest payments will amount to $175 billion.
“We are near completion of a plan that will see a substantial reduction of the interest charges that the Government has to pay on the instruments that are held by the banks. To impose a tax on that interest at this time would jeopardise the success of that plan. What we are expecting to save on the interest payments that Government has to make is way above what we would get from any special tax on them. We cannot afford to be penny wise and pound foolish,” he said.
He said that a significant reduction in interest rates will lead to reduced production costs that will make Jamaica more competitive and reduce prices to benefit consumers.
“Reducing interest rates is necessary to support businesses, encourage new investments and for job creation,” he added.
Mr. Golding said that, as the country looks forward to the end of the recession, it has to position its interest rate policy to enable new economic activity to take off, especially for micro, small and medium-sized enterprises.
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