Dear Editor,

The Government of Jamaica appeared to have done a good thing encouraging investment when it gave tax breaks to companies listing on the Junior Market of the Jamaica Stock Exchange. Providing incentives for these companies to raise capital should allow them to expand their business, employ more workers, and contribute to economic growth.

I don’t have information on whether this goal is being achieved or not. I note, however, that Jamaica’s economic growth is still anaemic at best. But this is not the focus of my letter.

Another reason for providing incentives for these companies to list on the stock exchange, I presume, is to broaden the scope of the stock market and to encourage participation by a wider proportion of the populace in the stock market. The more people investing in the stock market, the greater the amount of capital available, and ultimately more investable capital should translate into economic growth.

However, investing in the market is a two-way street. For investors to participate, shares must actually be available for them to buy, which brings me to a vexing issue. Many of these junior companies seem to have made only a token number of shares available for potential investors, while the owners control large stakes and are the ones who mainly benefit from stock price appreciation gained through higher profits as a result of the tax incentives. The Jamaica Stock Exchange daily quotes show many of these stocks with zero or very low volume, with many of them sometimes not trading for months — because I presume there are no shares available to buy.

My own personal experience in trying to buy shares in one of these companies was that after several weeks of placing an order through a broker, I was only able to buy less than one per cent of what I wanted. This is a joke, and I believe it defeats the purpose of the tax incentives given to these companies. Not only does it rob potential investors of the ability to invest in these companies and benefit from their success, it also means the owners are the ones largely benefiting from the tax incentives, with the country not having much to show from having granted these incentives.

As an offshoot, it further entrenches the already atrocious wealth inequality in the country. While I do believe that the owners have a right to enjoy the fruits of their hard work in building these companies, when the Government grants tax incentives, all citizens should have the right to benefit from whatever gains accrue from such incentives.

I therefore call on the Government to make it a condition for companies to get these tax breaks that they allow for greater participation by investors in the company. Minimum thresholds should be set for the number of shares available for potential investors. Only then do I believe these tax breaks will benefit all Jamaicans, and not just the wealthy few.

Jason Williams

Washington, DC, USA

jpwilliams4@gmail.com