Jamaica government delivers tax-free budget
KINGSTON, Jamaica, Friday April 19, 2013 – The Jamaica government has presented a J$521 billion (One Jamaica dollar = US$0.01 cents) tax free budget to Parliament with Finance Minister Dr. Peter Phillips indicating that the aim of the Portia Simpson Miller administration is to collect outstanding taxes and remove some distortions such as zero-rated electricity charges.
“You will note and no doubt the other members will note that this administration has presented a fully funded budget, there are no new taxes in this budget,” he told legislators on Thursday.
“The expenditure budget is to be financed by revenue flows of J$407.2 billion, loan receipts of J$103.3 billion and by drawing down cash balances of J$10.4 billion.”
Phillips said that the tax revenues of J$360 billion reflect the impact of the two tax packages announced last year, calculated for a full fiscal year.
He also said the government plans to make changes to the Customs Administration Fees (CAF) to favour raw material imports over finished goods. But that is expected to have no impact on revenues.
In focusing on the growth of the economy, Phillips promised that the government will implement several strategic investments with the logistics hub being one of the options.
Work on the hub is scheduled to begin by the end of this fiscal year and is expected to be completed in 2015/2016.
When established, the hub will position Jamaica at an important transit point in the global trading system.
According to Phillips, establishing Jamaica as a Logistics Hub will require significant investments in the sea and air ports as well as Jamaica’s industrial infrastructure and will involve a wide cross section of public and private sector interests.
The government anticipates that the hub will take advantage of the expansion of the Panama Canal due for completion in 2015.
During his presentation, Phillips said that the government would focus on activities surrounding Information and Communications Technology (ICT).
During this financial year, a total of US$20 million will be committed by the Development Bank of Jamaica to facilitate the construction of ICT centres that will create an estimated 7,000 to 8,000 jobs.
The government is also committed to the establishment of nine agro parks in order to create employment, increase agricultural output, reduce the national food import bill and stimulate food exports.
Phillips said as of June 1 this year, casino operators hoping to set up business in Jamaica will be able to make bids for permission to do so and that the period for the receipt of Requests for Proposals and Completed Applications will expire on September 30 with the government making orders declaring approved integrated resort developments by early 2014.
He told legislators that the relevant laws and regulations concerning casino operations here provide that they not be stand-alone installations but be part of Integrated Resort Developments, in which substantial new hotel rooms will have to be built.
Phillips reiterated that the Integrated Resort Developments with Casino is expected to create at least five jobs per room.
"Our law provides for a maximum of three such resorts with 2000 new rooms each. This will, upon completion, translate into at least 30,000.00 new permanent jobs. The construction phase of these Approved Integrated Resorts will lead to thousands of jobs," he said.
Phillips also made reference to concerns raised by the private sector that some Caribbean Community (CARICOM) member states may not be adhering to CARICOM’s rules of origin requirements that allow goods to be traded duty free throughout the region.
“This is a concern which we share because we are determined that every opportunity should be provided to Jamaica’s producers - small, medium and large to operate on a level playing field, where trade and investment are concerned.
“To the extent that breaches are confirmed we stand ready to collaborate with the Jamaican private sector. Because let there be no doubt, growth of Jamaica’s economy is our priority” he said.
In an immediate reaction to the budget, the opposition Jamaica Labour Party’s (JLP) spokesman on Finance, Audley Shaw, accused the government of being deceptive in saying that there are no new taxes.
"It is deception, because over J$12 billion of the tax revenues this year were included in the tax package which was tabled in February but did not become effective until April 1."
Shaw said that the 2013/14 projections included the J$11.4 billion first tranche of the J$45.6 billion drawdown from the National Housing Trust, which has boosted non-tax revenue to J$36.1 billion.
The February tax measures are expected to boost tax revenues by 13 per cent over 2013/14 and shaw, who will make his contribution to the budget debate in Tuesday, said the full impact of the tax measures will be felt over the next few weeks. (CMC) Click here to receive free news bulletins via email from Caribbean360. (View sample)