In its press release Monday, Jamaica Chamber of Commerce (JCC) welcomed the Government’s “steadfast commitment to maintaining both a balanced budget and no new taxes in an election year”.

This is reasonable, as in the budget debate the Government outlined a comprehensive and conservative fiscal strategy and still aimed for a balanced budget this fiscal year despite some slightly greater fiscal space than in previous years due to Jamaica getting close to meeting its 60 per cent debt-to-gross domestic product (GDP) target. In short, it could have run a small deficit and still met its debt-to-GDP target based on its projections.

The JCC also welcomed the announcement by Prime Minister Andrew Holness that there are plans to enact a revamped Urban Renewal Tax Relief regime by the end of 2025. It observed, “The Chamber has long held the view that the current regime is too slow and cumbersome to combat urban blight, and we look forward to a more streamlined regime with greater flexibility for developers in how they structure their investments.”

One of the puzzling things about our current downtown redevelopment tax policy is despite only a very small number of large well-audited companies going through the laborious process of applying for incentives — mainly GraceKennedy, Pan Jamaica Group, and Digicel — they still had to justify themselves every step of the way. This may be the explanation for why, as the prime minister mentioned, even of the relatively small amount of incentives approved over many decades, most were not actually used, because perhaps the companies simply got frustrated with the bureaucracy, or they waited so long they found another use for the money.

A better approach might be to simply allow the companies to move ahead with very clear steps to follow and audit them afterwards if deemed necessary, as would occur anyway. However, a creative and simple approach is also needed for smaller businesses that may not have the large taxable profits to benefit from the incentives, and these should not be left out if we are serious about transforming the town centres of every parish. Fortunately, the Chamber of Commerce already has a decades-old downtown redevelopment committee and works closely with all the parish chambers, so is ideally suited to help in this regard.

The JCC also advised that it “look[s] forward to seeing more on the Streamlining Processes for Efficiency and Economic Development (SPEED) initiative. The initial announcement of ‘common-sense’ changes to motor vehicle fitness rules is a good symbolic first step, but the overall success of the SPEED initiative will depend on sustaining momentum with many more adjustments being needed to regulations across the public sector”.

Its encouragement of new Minister Audrey Marks to set up a mechanism to solicit feedback from citizens and businesses on its proposals for changing outdated or unnecessary regulations or processes could be very powerful, and, of course, it also has had a legislative and regulation committee for over two decades, first set up by Past President Tony Chang, and currently chaired by prominent lawyer Emile Leiba.

It argues accelerated capital allowances for investments in buildings and plant and machinery is timely, “However, rapid enactment of the enabling legislation for this measure will be essential to ensure that businesses have the confidence to act upon it.”

The JCC also “welcome[s] the reduction in the rate of withholding tax applied to dividends paid to non-residents as a downpayment on reforming Jamaica’s dividend taxation regime. The fact that this costs minimal revenue just shows the critical importance of the ‘Bring Back Business Income’ to encourage Jamaican businesses to “bring home” their offshore activities in the current global environment. We look forward to receiving more details of that initiative

It “also strongly support[s] making the 2014 Pioneer and Large-Scale

Projects Tax Incentive Act fit for purpose to finally allow both harmonisation and other one-billion US-dollar projects to move forward, and we hope that the target of bringing that legislation to Parliament before the end of March is met. However, we note that the aggregate effect of the various tax policy announcements during the budget debate may amount to the most extensive volume of tax legislation in a short period that we have seen since the 2013 and 2014 tax reforms. The capacity of the drafting teams in the Ministry of Finance and Attorney General’s chambers will be stretched if these measures are to be enacted without undue delay”.

“The Jamaica Chamber of Commerce would like to work with the Government to establish a Micro-Stock Exchange for companies that wish to raise$10m-$50m in equity capital on the stock market, but note that we also still need to see the finalisation of the regulations for partnership structures that would allow the right Jamaican legal structures to encourage our local ‘private’ venture capital market,” it further stated

The latter point re regulations is critical, and not just for the Partnership Act. Jamaica still uses its old Partnership Act as the Limited Liability Companies Act passed in 2021 still has no implementing regulations so it is not operational. All of the regulations we have mentioned could benefit from the prime minister’s proposed SPEED initiative.

Even the proposed 15 per cent dividend tax rate for everybody announced in the budget, while an improvement, still means local fund managers will want to set up in Barbados or St Lucia to take advantage of the Caricom tax treaty, but this discourages US investors who prefer Cayman or the British Virgin Islands. Jamaica should be seeking to mobilise much larger US investor capital to invest in the Caribbean through Jamaica, particularly as it now has a better credit rating than most of Caricom, and better access to foreign exchange than all.

In this regard, it is very timely that the Jamaica Stock Exchange is having a forum this Thursday with leading US management consultancy McKinsey on Leadership Strategies for Success in the Era of Uncertainty. The forum plans to address disruption trends in 2025, avenues for growth and innovation, for example, generative artificial intelligence and the impact of geopolitical conditions in the Caribbean (timely as US Secretary of State Marco Rubio arrives today).

We need to finally revamp the Rockefeller initiative used to bring private sector investment to Jamaica in the early 1980s and feedback from global investors on what is required to attract investment.

Keith Collister