The Jamaica Stock Exchange (JSE) yesterday indicated that its quiet lobby to preserve the tax incentive afforded under the Junior Market has gained support from enclaves within the Private Sector Organisation of Jamaica (PSOJ), a position that runs counter to recommendations made by the organisation two years ago.

Concurrently, the Junior Market will accept two additional listings prior to year end, including a residential housing start-up 138 Living and an unnamed energy company, according to the JSE.

“We are lobbying the PSOJ and received some amount of feedback that they are in favour of working with us — to say that the incentive should not be removed,” stated Marlene Street-Forrest, general manager at the JSE.

Street-Forrest made the revelation at a luncheon yesterday attended by sponsors and seven companies listed on the Junior Market and whose founders are nominated for the upcoming Observer Business Leader 2013 Award. The luncheon was held at the Jamaica Observer headquarters in Kingston.

Companies represented included Access Financial, Jamaican Teas, Caribbean Cream, Derrimon Trading, Caribbean Producers Jamaica, Dolphin Cove, and Knutsford Express.

The Government last year announced that it would remove the 10-year tax break afforded to companies that list on the Junior Market effective March 2016. The JSE said it lobbied other institutions in an attempt to sway support on the extension of the incentive to no avail.

“After many months of lobbying, we went to the Government, the International Monetary Fund representatives, we went to the World Bank, we went to the PSOJ. We tried to get attention to say that we didn’t want this removed. Nevertheless, [companies] will only get five years [tax exemption] and that incentive goes away come March 2016,” she recalled.

Yesterday, Chris Zacca, the PSOJ president, in a telephone response to Business Observer queries, indicated the PSOJ would “discuss the matter” in order to come to a decision.

“We haven’t taken a formal position on this, but there are a certain number of influential business people that feel we should look back at the junior exchange as an example of how to get growth in business by the removal of regulation and reduction of taxation,” Zacca said

“I feel that it encouraged the expansion of a number of businesses, and therefore we should look back at it,” he added, pointing out that this was his personal view.

He offered no timeline when asked for the review process.

In 2012, the PSOJ, under its Private Sector Working Group (PSWG) led by then president Joseph M Matalon, supported the removal of waivers across much of the economy, including the Junior Market in an effort to raise total taxes to Government.

Yesterday, Zacca explained that some of the PSWG’s recommendations were not adopted by Government, which allows the PSOJ to review its position on certain proposals including the Junior Market.

Some of the PSWG’s tax reform proposals reportedly recommended removing tax waivers for companies listed on the Junior Market; tax breaks for hotels and tourism interests; reducing the GCT rate from 17.5 per cent to 12.5 per cent; slashing the corporate tax rate from 33 per cent to 15 per cent; slapping a 12.5 per cent GCT rate on tourism-related services; imposing a 10 per cent taxation rate on dividends; and increasing GCT on electricity from 10 per cent to 12.5 per cent.

According to the PSOJ, the proposals would have garnered some $7.6 billion for the Government. The working group, in its findings, revealed that of the over 60,000 registered companies in Jamaica, only 3,000 firms pay corporate income tax.