The Private Sector Organisation of Jamaica has commended the budget tabled recently by Minister of Finance and the Public Service Dr Nigel Clarke.
On Tuesday the minister presented the budget for fiscal year 2020/21 in the Lower House, the main highlight being a tax cut of JM$18 billion.
In response to the budget presentation, PSOJ on Wednesday, March 11, issued a statement.
“The Private Sector Organisation of Jamaica is satisfied with the inclusive thrust of 2020/21 budget presented by the Hon Dr Nigel Clarke and [is] comfortable that it should positively enhance the business climate and increase confidence in very uncertain times exacerbated by the local presence of COVID-19,” the statement read in part.
“We acknowledge the Government of Jamaica’s (GoJ) targeted strategies to the business community to stimulate economic activity by reducing GCT, the distortionary asset tax and offering a tax credit offered to Micro and Small businesses,” it continued.
In particular, the PSOJ believes the reduction in GCT will increase the purchasing power of average Jamaicans and is likely to have a positive social impact on the most vulnerable.
In addition, the business lobby group said it supports the reduction in asset tax on financial institutions, which should, in turn, lower their service costs.
While welcoming JM$1 billion allocated to the social protection for the aged and working poor — those who do not benefit from Programme of Advancement through Health and Education, National Insurance Scheme or private pension — PSOJ said it estimates the measure will reach 30,000 elderly Jamaicans.
The PSOJ also commended the Government’s MSME tax credit. Micro, small and medium enterprises with revenue not exceeding JM$500 million may file for JM$375,000 upon filing tax returns.
“This is expected to create different sources of incentives for all stakeholders. Firstly, MSMEs will now be more likely to register their business and thus it enhances formality in the sector,” the PSOJ argued.
“It will also provide a much-needed incubator for businesses making less than approximately JM$1.5M in profits before taxes as this income can now be used to reinvest and grow further. Finally, as more MSMEs become formalised and are allowed more space and support to grow, future taxes for those that do grow are likely to be higher.”
The PSOJ also said that the Government’s JM$2-B response to and JM$7-B contingency fund for the coronavirus are “very balanced as it provides fiscal stimulus and protection across the board”.
Notwithstanding, the organisation said there is still uncertainty surrounding a slowdown in the domestic and global economy. As such, it cautions that tax revenues could be at risk.
“The PSOJ looks forward to the contribution of the Opposition spokesperson on finance Mr Mark Golding as he assesses the finance minister’s budget presentation, and welcome any constructive recommendations that may be more impactful on the quality of life of all Jamaicans,” the statement ended.