Proud of you, SBAJ, but now the work begins

Sunday, April 21, 2019

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Jamaica can be justly proud of bringing off a hugely successful regional conference on Micro, Small and Medium-sized Enterprises (MSME) in Kingston from April 16-18, ending on a high note.

Under the auspices of the Small Business Association of Jamaica (SBAJ), the three-day conference treated delegates from across the Caribbean to a rich menu of exhibits and presentations.

We owe a debt of gratitude to the combined leadership skills of chairperson of the organising committee, Dr Blossom O'Meally-Nelson and SBAJ President Hugh Johnson. Speakers ranged from Minister of Industry, Commerce, Agriculture and Fisheries Audley Shaw to Professor Densil Williams of The University of the West Indies.

Through good and bad times, the small business sector has been a consistent source of employment in every activity, in every part of the country — unlike manufacturing and bauxite which are largely concentrated in certain parts of the country.

Small, micro and medium-sized businesses have been the means to salvage economic survival for those with skill and initiative but no employment opportunities. The sector has a very high mortality rate as some of these entrepreneurs have more initiative and energy than business acumen and managerial skills.

The perennial constraints have been the high cost and unavailability of easily accessible financing, and high taxes and fees. This has been exacerbated by a lack of venture capital, lack of collateral, and poor financial record-keeping among small businesses.

Over the decades, successive governments have provided specialised pools of funding with mixed success. There is a special window for micro businesses with revenues under $10 million to access small loans and a $1.5-billion fund managed by the Development Bank of Jamaica.

On the question of taxes and administrative fees, the Government has introduced a number of policy measures to make doing business easier and less expensive, as part of the 2019/20 budget.

In particular, the abolition of the Minimum Business Tax, payable by all registered companies, and the increase in the annual General Consumption Tax (GCT) threshold to $10 million, up from the current $3 million, relieves some 3,500 small businesses of the requirement to file GCT returns.

These measures have come at the sacrifice of badly needed revenue by the country, hence it is incumbent on MSMEs to make use of them to ensure that Jamaica benefits as much as possible.

In his address on the final day of the MSME conference, Minister of Finance and the Public Service Dr Nigel Clarke announced that he had established a committee to examine the feasibility of asset-based financing as a funding option for MSMEs. This would allow MSMEs to use accounts receivables to secure financing.

We endorse this further help for small businesses and hope that the days of lip service to this long-suffering sector are over. Of course, these measures come with the responsibility to make use of them and to cease the constant fulmination about the difficulties of doing business.

Proud of you, SBAJ. Now the real work begins.

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