KINGSTON, Jamaica —Prime Minster Andrew Holness has given a strong indication that he is re-thinking the structure of tax and incentives for new investors.

Noting that the “windows of opportunity are closing for Jamaica” in the much touted areas of logistics and business process outsourcing as well as other fields, Holness said that tax issues need to be addressed where they inhibit investment.

He was gaving the keynote address at the opening ceremony of the Jamaica Stock Exchange Capital Markets Conference being held at the Jamaica Pegasus from January 24 to 26.

“It makes no sense that Jamaica is centrally located and close to all shipping routes and (yet) companies find that our tax system does not endear or support their [taking advantage],” he asserted.

He reminded the audience that in 2016 the newly elected Jamaica Labour Party administration kept its promise of returning tax incentives lasting 10 years to new entrants to the Junior Market of the Jamaica Stock Exchange.

The incentives were cut under the previous political administration, which in a series of legislative changes also reduced other incentives to the business sector, while at the same time replacing them with new ones.

“In 2016 we gave the commitment that we would return benefits to the Stock Exchange,” Holness said, noting that this had been done with three new companies listed on the JSE market subsequently.

Under amendments passed, new entrants to the Junior market can now avoid corporate tax in the first five years, and 50 per cent of taxes in the next five.

The prime minister, who recently visited Israel, said other tax issues were being reviewed as a result of that experience.

 “One of the first things …which keeps the windows closed is that Jamaicans tend to view things through a political prism. One of the major investors in Jamaica for 45 years Zim Shipping is Israeli. They stayed with us through the thick and thin. They want to expand to take advantage of a major logistical opportunity, but the tax system is not encouraging. This government has to change that,” he commented.

Holness also said Government was committed to divesting assets which were being held by Government bodies with low rates of return and also listing some entities on the stock market.

“In addition to transforming the public sector, Government is committed to asset utilisation,” he said, noting that the Urban Development Corporation (UDC) and the Factories Corporation of Jamaica (FCJ) have around $100 billion in assets, which were not generating much in revenue.

“We like to keep high reserves, assets… (but) just having them on the balance sheet does not create growth or create jobs,” Holness stated.

The prime minister said the Government would work on improving the regulatory arm of government and combine that with a properly incentivised private sector.

Government, he added, would also ensure that there is equity, with the poor not left out of the equation.

“In the balance of things it is important that we encourage the stock exchange,” he concluded, noting that while the spread of market participation was not as deep as desired now, one day Jamaicans would begin buying stocks towards retirement instead of spending on Brazilian hair.

Avia Collinder