THE Government yesterday tabled supplementary measures it has sent to the International Monetary Fund (IMF) for structural reform to strengthen the country’s fiscal framework, the focus for the rest of 2013/14 under its IMF-funded economic programme.

Copies of both the Letter of Intent (LOI) sent to IMF Managing Director Christine Lagarde on September 13, and the Jamaica Supplementary Memorandum of Economic and Financial Policies (MEFP), were both tabled in the House of Representatives by Minister of Finance and Planning Dr Peter Phillips — a day after the IMF board approved the first review under the new four-year Extended Fund Facility.

The approval paved the way for Jamaica’s access to a second drawdown of approximately US$31 million from the US$944 million made available by the IMF under the facility agreed to on May 1 this year.

In a statement to the House, Dr Phillips reeled off the positives, including that “despite the challenges, the Government comfortably met all the quantitative conditions for the first review, which ended in June, and the structural benchmarks were implemented in a timely manner”.

However, he explained that, while the Government remains fully committed to the specific targets set out in the April 2013 MEFP, it was necessary to submit to the Fund a second LOI and Supplementary MEFP to explain an “appreciably strengthened” policy framework.

He said that with the supplementary memorandum, the foundation of the programme will remain debt-sustainable and geared towards improved competitiveness. However, the new proposals “elaborate” on the framework for reform of the Tax Incentive Regime and on the conceptual framework for a binding fiscal rule.

It noted principles to guide the tax incentive reform, including simplification of the tariff structure and introduction of a system of tax credits, applicable across all sectors, to replace the sector-specific incentives currently existing.

Phillips said that details of the tax incentives report, which missed the September 30 deadline of the April memorandum, will be tabled in the House by October 31. However, the copy of the new memorandum tabled yesterday listed the September 30 deadline as an “unchanged structural benchmark”.

He also admitted that the Government will not be able to meet the programme requirement to dispose of its assets in Clarendon Alumina Production (CAP) by the end of 2013, as another structural benchmark.

“The Government had to conclude that, despite extensive efforts, no potential buyers could be found,” the new memorandum confirmed.

The Government says that it had, therefore, put in place alternative arrangements to finance CAP’s past and possible future operational losses, without any additional Government guarantees or other liabilities, and to facilitate the sale of the company at a later stage.