Equalise tax benefits for local businesses
The Government of Jamaica has to be careful that people don't begin to see it as being anti-Jamaican business. For decades Jamaicans have begged for support for local businesses, a concept that most of us understand and endorse. When asked how Jamaica's economic situation can be improved, we immediately recite: "We need to produce more."
Of course, some people would argue that the effort has been futile because too many Jamaicans prefer to buy imported items. There are some among us who consistently choose the foreign-made products that sit beside our locally made products on the shelves. The direction that the government has taken with the recently imposed tax regime shows that it is no different from those who are "foreign-minded".
Jamaican businesses are currently required to pay corporate income tax at an incredibly high rate of 25 per cent. Earlier this year the current administration made another announcement mandating Jamaican businesses to pay a minimum flat income tax of $60,000, whether or not they make a profit. At that time the finance minister preached that "we are all in this together", a story that we bought hook, line and sinker. Little did we know that the minister had a bill in his back pocket, which he would table only a few months later, and which would exempt non-Jamaican companies from income tax.
The bill that exempts non-Jamaican companies was tabled in the House of Representatives on September 18, less than four months after the new taxes became effective. The specific wording in the bill, which is called "The Income Tax (Amendment) Act" speaks to non-Jamaican "persons" being exempt from income tax. However, in Jamaica a company is considered a "legal person", though artificial in nature. Therefore, the amendment will exempt not only non-Jamaican individuals from income tax, but also non-Jamaican companies.
The idea is that the tax exemptions will create a more favourable environment for non-Jamaican companies, encouraging them to open head offices in Jamaica. Shouldn't we support Jamaican businesses by giving them an equally favourable environment through corporate income tax exemptions? Shouldn't the Jamaican Government itself support Brand Jamaica? Let's give Jamaican businesses a fighting chance by levelling the playing field.