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An aerial view of New Kingston, Jamaica. (Photo: wikicommons)

Banks in Jamaica to forgo $3 billion in asset tax for COVID-19 response

An aerial view of New Kingston, Jamaica. (Photo: wikicommons)

Banks in Jamaica will forgo the reduction of the asset tax for a year, said Finance Minister Dr Nigel Clarke in Parliament today, March 17.

Minister of Finance and the Public Service Dr Nigel Clarke

The decision will make an additional $3 billion available to the Government’s COVID Fiscal Contingency, bringing the total amount to $10 billion.

The reduction in asset tax was announced by Minister of Finance and the Public Service Dr Nigel Clarke during his Budget Debate presentation last week and would have been implemented on April 1.

” Working together, supporting each other, Jamaica will overcome this. These fiscal stimulus measures will give us the best opportunity for our eventual economic recovery.”

– Minister of Finance and the Public Service Dr Nigel Clark

He said “the asset tax is a tax on consumers and not good for monetary transmission. However given the impact of the measures taken to protect the health of the Jamaican people we will be accelerating the intervention and deploying it directly to those who need it most.”

The minister added the contingency is for eventualities and “not a commitment to spend.”

The Finance Minister also announced other measures that the Government will take to mitigate the impact of the coronavirus.

Among those he presented in the House of Representatives are:

  • waiving the Special Consumption Tax on 100,000 litres of alcohol for use in making (or substituting for) sanitisers that will be donated to the National Health Fund and Health Ministry.
  • waiving Customs Duty on the importation of masks, gloves, hand sanitisers and liquid hand soap for 90 days.
  • waiving the Customs requirement for business process outsourcing firms to keep equipment used in their operations at their place of business to facilitate working from home
  • engaging commercial banks to provide temporary cash-flow support to businesses and consumers in affected sectors through principal payment deferral, new lines of credit etc
  • introduction of the COVID Allocation of Resources for Employees programme.

Dr Clarke said implementation details and accountability mechanism for the respective measures are being finalised.

“An adverse economic impact from COVID-19 is unavoidable. However, the Government will implement a range of economic policy tools, to help cushion against the effects. Working together, supporting each other, Jamaica will overcome this. These fiscal stimulus measures will give us the best opportunity for our eventual economic recovery.”