THE Government has overcome a threat to the completion of the International Monetary Fund's (IMF) processing of its first quarter performance under the new Extended Fund Facility (EFF) by Monday, after admitting its inability to produce new tax incentive reform legislation this week.
The September 30 deadline for tabling a new Omnibus Tax Incentive legislation in Parliament was included in the staff level understanding between the Government and an IMF mission to Jamaica in August, which assessed the country's first quarter performance under the four-year Extended Fund Facility (EFF) agreement.
It was expected that the Bill would have been tabled when the House of Representatives met yesterday, in order to meet the deadline — a prior action for IMF Executive Board approval of the first quarterly performance which, if positive, will mean the first drawdown of US$30 million (approximately $3 billion) under the new agreement.
But in a statement to the House yesterday, Minister of Finance and Planning Dr Peter Phillips disclosed that finalisation of the tax incentive proposal would require additional time.
"It was recognised that the finalisation of tax incentive proposals, along the lines mutually agreed, would require additional analytical work," Dr Phillips told the House.
"In light of these additional requirements, the Government of Jamaica and the IMF mission staff reached a staff-level understanding that meeting the end-of-September 2013 deadline for the tabling of relevant tax incentive reform legislation would not be possible nor advisable. The legislation will now be tabled in October," he explained.
Dr Phillips said, however, that the delay would not impact the expected timeline for the implementation of the legislation. He also advised that the Government had been assured by the IMF staff that the revised process would not delay the executive board meeting scheduled for Monday in Washington, DC, to discuss the completion of the first review.
"We are confident that this review will be completed," Phillips assured the House. He added that he was reassured by the fact that the IMF staff had already circulated the relevant documentation, in accordance with the agreed schedule.