JMA says proposed amendments to Act will destroy sector
THE Jamaica Manufacturers' Association (JMA) says that it will not sit by and allow Government to amend the GCT Act to include provisions that the association believes will destroy the local manufacturing sector.
President of the JMA, Brian Pengelley, emphasising that the Government is seeking to amend the Act without direct consultation with the private sector, said the association has serious concerns that the proposed amendments will, among other things, remove an existing provision that allows for deferment of General Consumption Tax on raw materials and capital equipment to modernise manufacturing plants.
According to Pengelley, the association's understanding of the amendment is that the GCT must be paid at the point of importation, and that refunds cannot be made "until the expiration of five taxable periods", which translates to five months, and after six months in the case of capital goods.
"In addition, changes have been made to the GCT Act, as of June, that now has all Government ministries, departments and agencies (MDAs) liable for GCT. The difficulty is that suppliers to these MDAs will have to wait up to 30 days after the MDA has received their invoice to receive a tax withholding certificate from the entity to which they sold the goods, and then another 30 days before they can make the claim, which would be in their next filing period," Pengelley told yesterday's launch of the Buy Jamaican Public Education Campaign at Rainforest Seafoods in Kingston.
"I put it to you, that there is no business in Jamaica in the current economic climate that can sustain these kinds of receivables/debt without having to put major financing arrangements in place...," he said, noting that other aspects of the Bill will impact their cash flow.
"I have spoken with the other major private sector leaders, and can tell you that we are firmly aligned that we will not sit back and allow these amendments to the GCT Act to be passed," Pengelley said.
The Bill amending the GCT Act was tabled in the House of Parliament on Tuesday by House leader Phillip Paulwell on behalf of Minister of Finance and Planning Dr Peter Phillips, who is currently abroad.
Yesterday, the JMA president argued that there is no practicality nor sound business reasoning behind the proposed amendments, but that they are "purely focused on addressing revenue gaps for the Government, and are absolutely contrary to the rhetoric that has been presented" about a growth strategy since Jamaica entered into the current agreement with the International Monetary Fund.
"... If indeed this Bill is passed as we understand it, and companies have to incur these costs, who does the Government think is going to pay them? Let me tell you that it will be the consumers of Jamaica who will feel it with every dollar they earn and spend," he said.
Meanwhile, Pengelley, in endorsing the 'Buy Jamaican... Build Jamaica Campaign', said that buying local helps the country's economy and he encouraged Jamaicans to support the campaign, which runs from June 11 to July 11. Its purpose is to educate Jamaicans about the advantages of buying Jamaican products and encourage consumers to read labels before purchasing items. The campaign will be publicised through print, broadcast and social media.