New tax measures could kill businesses, says JMAFriday, September 02, 2011
BY INGRID BROWN Observer senior reporter email@example.com
THE Jamaica Manufacturers' Association (JMA) said a survey conducted among its members indicates that several businesses would pull out of the country if the Government goes ahead with the proposed Green Paper for a new tax regime in its present form.
According to JMA President Brian Pengelley, 30 per cent of the 300 members who responded to the survey believed the proposed tax reform measures will result in the closure of their business, while 33 per cent said they would consider moving their business to another country, with most naming Trinidad.
"If the Green Paper was to have gone through as it was, it would be devastating; it would have brought this country to a halt, manufacturers would have had no choice," Pengelley told the weekly Rotary Club of Kingston luncheon at the Jamaica Pegasus Hotel in Kingston yesterday.
The JMA head said, too, that 66 per cent of the respondents who planned to invest approximately $7 billion over the next five years said they would no longer undertake these investment plans under the proposed tax measures.
The survey, he explained, further revealed that all persons surveyed on the potential impact of the proposed Green Paper revealed that these measures would have a negative impact on cash flow. Meanwhile, 96 per cent felt that the measures would affect the competitiveness of locally manufactured goods.
Pengelley made it clear, however, that the JMA was in support of tax reform and has been active in the consultation process, adding that discussions with the Government to propose changes to the Green Paper have accelerated in the last three weeks.
"We accept that there will be implications, and changes will have to be made, but we expect that this will be shared across all sectors," he insisted.
According to Pengelley, the JMA believes in striving to ensure that manufacturing, particularly agro-processing and export, remains viable and competitive with the implementation of tax reform.
He said the present Green Paper proposes upfront duties and charges ranging from 20.5 per cent to 25 per cent at the port and a reduction in the Common External Tariff (CET) to 20 per cent as well as reduction of the additional stamp duty, which, he said, would threaten the livelihood of the approximately 300,000 persons employed to manufacturing and agriculture.
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