Private sector focuses on improving economy

Private sector focuses on improving economy

PSOJ president sees three primary challenges for economy

BY BALFORD HENRY Senior staff reporter

Tuesday, May 03, 2016

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Private Sector Organisation of Jamaica (PSOJ) president William Mahfood says that the three primary challenges facing the current government are the issues of bureaucracy, tax policy and crime.

"It really boils down to three critical areas that are going to change the game for us, in terms of unlocking the economic growth opportunities — one is bureaucracy, the second one is tax policy and the third one is crime," Mahfood told a private sector business luncheon hosted by the chairman of the Jamaica Observer, Gordon "Butch" Stewart, at the newspaper’s head office, Beechwood Avenue, Kingston, yesterday.

Mahfood said that the government has to deal with the issue of crime. However, he argued that the area which could most easily be addressed, in the short term, was the tax policy.

"While the challenges with this income tax threshold are going to be real for the government, I believe that it is a step in the right direction, but it has to come in the context of a whole comprehensive tax reform," Mahfood told the luncheon, which attracted a large number of the country’s most influential business personnel to discuss cooperation with the government in meeting the economic hurdles.

"I think the time has come for us in the private sector to really say to the government that we must be involved in tax policy reform, because it impacts all of us and our ability to invest and make money and grow jobs and grow the economy," Mahfood added.

He said that for too long successive governments have historically hidden behind closed doors "crafting policy, taking things from different recommendations but not in a really holistic way".

"I think that it is necessary for us, once and for all, to say look, all of us as the private sector have a vested interest, not only in our businesses, but also our employees and the nation and the comprehensive reform that is needed has to take all of that into account. I think that is the single message we need to send on tax and tax policy at this time," he said.

Mahfood also noted that the most recent Jamaica Chamber of Commerce business confidence numbers were the highest they had been in 15 years.

The proportion of firms that expected an improved economy surged to 62 per cent in the first quarter of 2016, nearly twice the previous quarter’s 32 per cent. Just 15 per cent of all firms expected the economy to worsen in the year ahead, less than half the 38 per cent recorded in the closing quarter of 2015.

Overall, Jamaican firms held the most positive outlook for the national economy recorded since the survey began 15 years ago, the report said.

"I think the current administration got a little bump from the election, but I think that it will wane quickly, if there is not a sense of things happening fast on a number of fronts including crime, job creation and economic growth plans — and the implementation of the income tax threshold is also going to be a factor," he added.

He said that while the challenges with the proposed $1.5-million income tax threshold are going to be real for the government, he believes that it is a step in the right direction, but has to be done in the context of a wholesale comprehensive tax reform.


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