Opposition spokesman on finance Julian Robinson made a pitch to micro, small and medium-sized enterprises (MSMEs) on Thursday with a promise that a future People’s National Party (PNP) Government will exempt them from corporate income tax obligations for three years to encourage more of them to become part of the formal economy.

Making his contribution to the 2025/26 Budget Debate at Gordon House, Robinson said the policy is aimed at providing greater financial flexibility for MSMEs to grow and develop. To this end, the PNP, if elected to office, will “exempt new MSMEs from corporate income tax for an initial three-year period, with the possibility of an extension to five years”.

“When this initiative is launched, businesses that started before its implementation and are still within their first one to three years of operation will also be eligible for the exemption,” Robinson outlined.

He said the policy will encourage MSMEs to enter the formal economy, allowing them to access Government support and institutional benefits without the immediate burden of corporate income tax.

He also argued that regulatory and tax burdens, cumbersome regulations and high compliance costs discourage MSMEs from formalising and scaling their businesses.

“The process of registering, licensing, and complying with tax obligations remains too complex and costly for many entrepreneurs, forcing them to operate in the informal economy,” Robinson said.

And with over 80 per cent of operators in the MSME sector unable to access loans to fund their businesses, the PNP is committing that, if returned to power, it will reform the loan structure at the Development Bank of Jamaica (DBJ) to make accessing DBJ loans more attractive for MSMEs.

He said that only 17 per cent of MSMEs can access credit from banks, while 53 per cent rely on personal savings to fund their operations.

“This lack of financing severely limits their ability to expand, invest in new technology, or hire skilled employees,” said the Opposition spokesman.

He also noted that MSMEs are only able to secure 1.1 per cent of government contracts, largely due to the fragmented and uncoordinated nature of Government-funded projects. He said this makes it difficult for business owners to navigate available resources.

Robinson said this prevents small businesses from benefiting from State-led economic activity, further limiting their growth potential. He said a future PNP Government will “carve out a portion of the Government-funded projects for MSMEs during the procurement process.

He said a specific percentage will be reserved for MSMEs, through a competitive procurement process, mandating that, where possible, ministries, departments, and agencies prioritise and award Government of Jamaica projects to these businesses.

“This policy will create more opportunities for MSMEs to participate in the formal economy, stimulate local entrepreneurship, and drive sustainable economic growth,” Robinson said.