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Big relief package
PM announces tax cuts, duty exemptions, millions in loans
Monday, December 15, 2008
PRIME Minister Bruce Golding last night outlined a package of tax cuts, duty exemptions and hundreds of millions of dollars in loans in what he said were immediate measures to provide relief to vulnerable sectors of the economy.
GOLDING. now is not a time to curl up or panic
The announcements by Golding comes as the country tries to survive the global financial crisis that has plunged the economies of some of the world's richest nations into recession.
But even as he announced the stimulus measures in a national broadcast, Golding signalled that his administration was already fashioning policy and structural changes in order to give Jamaica a head start when the crisis ends.
"Now is not a time to curl up or panic," said Golding. "Our eyes must pierce through the fog to see those things that might not now be within our grasp but are within our reach. Even in times of trial and adversity, there are opportunities that we must seize and capitalise on.
"There are a number of initiatives we have been working on all of this year and they will inform the preparation of the budget for the next fiscal year and the programmes we will pursue," Golding said. "There are things we must do now to position ourselves so that when the crisis has passed and the recovery begins, we can be at the head of the line. Some of these will involve far-reaching policy and structural changes to make Jamaica more business and investment friendly, improve our human and institutional capacity and make ourselves a more productive and competitive economy."
Last night, Private Sector Organisation of Jamaica (PSOJ) President Chris Zacca described the measures as a bold and welcome mix of employment-creating initiatives that reduce the burden on the productive and export sectors, and should bring relief to Jamaican consumers and wage earners.
"Despite the very limited resources available, the PSOJ believes the prime minister has acted boldly and correctly in providing a significant degree of relief to the real economy," Zacca told the Observer.
Reiterating the measures already implemented for the financial sector, Golding first turned his attention to the tourism sector where layoffs have already been announced, most notably by Sandals Resorts International on Friday.
In the face of the downturn in tourism, the prime minister said that the Government "has ramped up its advertising and marketing programme" overseas and he commended the major hotel operators who have done likewise.
He also announced that effective January 1, the general consumption tax (GCT) paid by hotels will be slashed by half to 4.125 per cent. "This measure will last for six months, at which time the situation will be reviewed," he said.
The Development Bank of Jamaica (DBJ), he added, will make available a special loan facility of J$500 million to provide working capital to players in the tourism sector, some of whom are experiencing cash flow problems. Loans will be offered to a maximum of J$50 million at an interest rate of 10 per cent for a period of two years.
"This is in addition to the $100 million already being provided by the Tourism Enhancement Fund," Golding said.
The measures to help the manufacturing sector include:
. removal of Customs User Fees payable on capital goods and raw materials, effective January 1;
. reduction from two years to one year the time allowed for depreciating the cost of capital equipment, also effective January 1; and
. adjustment of Government procurement policy to provide a 10 per cent margin of preference to Jamaican-owned companies. This, he said, will give preference in the award of contracts to a Jamaican-owned company over a foreign-owned company if the bid submitted by the Jamaican-owned firm is not more than 10 per cent above that of a foreign competitor.
The support for the small business sector will see:
. the DBJ allocating $350 million through the Jamaica National Small Business Loans Ltd to provide additional funds for lending to small businesses and micro-enterprises;
. $150 million provided to the Jamaica Business Development Centre for on-lending at 10 per cent to small businesses and micro-enterprises that are unable to meet the full collateral requirements for conventional loans. "These must be for the production of goods or the provision of services, not trading,"
Golding emphasised;
. an additional $150 million provided at similar rates through designated credit unions for similar purposes;
. all Government agencies mandated to ensure that at least 15 per cent of their total procurement is reserved for small business and micro-enterprise suppliers. These are defined as businesses or enterprises with an asset base of less than $30 million; and
. starting January 1, only businesses with annual sales more than $3 million will be subject to GCT requirements, a significant shift from the current policy requiring all businesses with annual sales above $1 million to register and submit monthly GCT returns.
"This will benefit approximately 2,800 small business operators," said Golding.
He also said that he expected to sign next month the disbursement of a US$300-million facility with the Inter-American Development Bank to provide loans to the productive sector through commercial banks and the EX-IM Bank.
In addition, beginning on January 1, the tax on dividends paid by all locally owned companies will be abolished "to help them to keep going, to protect the jobs of their workers and to encourage them to invest even in this difficult time", Golding said. As well, the transfer tax on property transactions will be slashed to five per cent from 6 1/2 per cent on January 1 "to provide some stimulus to the real estate market and construction sector".
The prime minister also had news for mortgage holders, saying that the National Trust (NHT) will offer a range of measures to assist persons who have lost their jobs or whose income flow has been disrupted.
"These involve suspension of mortgage payments, reduction in monthly payments, rescheduling of mortgage payments, extension of the mortgage period and reduction in interest rates," said Golding. "The exact treatment to be applied will vary from case to case and will be dependent on the peculiar circumstances of each borrower."
He encouraged people with NHT mortgages to avoid having their arrears mount by contacting the NHT and working out arrangements with the state agency.
"I have instructed the NHT to assign adequate personnel to deal with those borrowers who may need to seek this assistance," said Golding. "But I urge those who are not so affected to pay their mortgages. That is the only way we will be able to assist those who are in difficulty."
He also said that the Government would, effective January 1, increase from 90 to 180 days the period after which private mortgage lenders are allowed to have non-performing loans on their books.
"This will remain in place until the current economic crisis is behind us," he said.
The prime minister also said that effective today, people who have shipped barrels and packages with personal effects valued at less than US$3,000 will not pay duty once they are cleared or arrive in the island before December 31.
Golding also noted the effect of the financial crisis on the bauxite/alumina sector worldwide and said that his administration has been in "intense discussions" with the firms here and the unions in order to avoid plant closures.
"The Government has had to offer certain concessions and we may not be able to avoid a cutback in production, but we are doing everything possible to keep the plants in operation and save the jobs of the workers in the industry," said Golding.
http://www.jamaicaobserver.com/news/...F_PACKAGE_.asp
PM announces tax cuts, duty exemptions, millions in loans
Monday, December 15, 2008
PRIME Minister Bruce Golding last night outlined a package of tax cuts, duty exemptions and hundreds of millions of dollars in loans in what he said were immediate measures to provide relief to vulnerable sectors of the economy.
GOLDING. now is not a time to curl up or panic The announcements by Golding comes as the country tries to survive the global financial crisis that has plunged the economies of some of the world's richest nations into recession.
But even as he announced the stimulus measures in a national broadcast, Golding signalled that his administration was already fashioning policy and structural changes in order to give Jamaica a head start when the crisis ends.
"Now is not a time to curl up or panic," said Golding. "Our eyes must pierce through the fog to see those things that might not now be within our grasp but are within our reach. Even in times of trial and adversity, there are opportunities that we must seize and capitalise on.
"There are a number of initiatives we have been working on all of this year and they will inform the preparation of the budget for the next fiscal year and the programmes we will pursue," Golding said. "There are things we must do now to position ourselves so that when the crisis has passed and the recovery begins, we can be at the head of the line. Some of these will involve far-reaching policy and structural changes to make Jamaica more business and investment friendly, improve our human and institutional capacity and make ourselves a more productive and competitive economy."
Last night, Private Sector Organisation of Jamaica (PSOJ) President Chris Zacca described the measures as a bold and welcome mix of employment-creating initiatives that reduce the burden on the productive and export sectors, and should bring relief to Jamaican consumers and wage earners.
"Despite the very limited resources available, the PSOJ believes the prime minister has acted boldly and correctly in providing a significant degree of relief to the real economy," Zacca told the Observer.
Reiterating the measures already implemented for the financial sector, Golding first turned his attention to the tourism sector where layoffs have already been announced, most notably by Sandals Resorts International on Friday.
In the face of the downturn in tourism, the prime minister said that the Government "has ramped up its advertising and marketing programme" overseas and he commended the major hotel operators who have done likewise.
He also announced that effective January 1, the general consumption tax (GCT) paid by hotels will be slashed by half to 4.125 per cent. "This measure will last for six months, at which time the situation will be reviewed," he said.
The Development Bank of Jamaica (DBJ), he added, will make available a special loan facility of J$500 million to provide working capital to players in the tourism sector, some of whom are experiencing cash flow problems. Loans will be offered to a maximum of J$50 million at an interest rate of 10 per cent for a period of two years.
"This is in addition to the $100 million already being provided by the Tourism Enhancement Fund," Golding said.
The measures to help the manufacturing sector include:
. removal of Customs User Fees payable on capital goods and raw materials, effective January 1;
. reduction from two years to one year the time allowed for depreciating the cost of capital equipment, also effective January 1; and
. adjustment of Government procurement policy to provide a 10 per cent margin of preference to Jamaican-owned companies. This, he said, will give preference in the award of contracts to a Jamaican-owned company over a foreign-owned company if the bid submitted by the Jamaican-owned firm is not more than 10 per cent above that of a foreign competitor.
The support for the small business sector will see:
. the DBJ allocating $350 million through the Jamaica National Small Business Loans Ltd to provide additional funds for lending to small businesses and micro-enterprises;
. $150 million provided to the Jamaica Business Development Centre for on-lending at 10 per cent to small businesses and micro-enterprises that are unable to meet the full collateral requirements for conventional loans. "These must be for the production of goods or the provision of services, not trading,"
Golding emphasised;
. an additional $150 million provided at similar rates through designated credit unions for similar purposes;
. all Government agencies mandated to ensure that at least 15 per cent of their total procurement is reserved for small business and micro-enterprise suppliers. These are defined as businesses or enterprises with an asset base of less than $30 million; and
. starting January 1, only businesses with annual sales more than $3 million will be subject to GCT requirements, a significant shift from the current policy requiring all businesses with annual sales above $1 million to register and submit monthly GCT returns.
"This will benefit approximately 2,800 small business operators," said Golding.
He also said that he expected to sign next month the disbursement of a US$300-million facility with the Inter-American Development Bank to provide loans to the productive sector through commercial banks and the EX-IM Bank.
In addition, beginning on January 1, the tax on dividends paid by all locally owned companies will be abolished "to help them to keep going, to protect the jobs of their workers and to encourage them to invest even in this difficult time", Golding said. As well, the transfer tax on property transactions will be slashed to five per cent from 6 1/2 per cent on January 1 "to provide some stimulus to the real estate market and construction sector".
The prime minister also had news for mortgage holders, saying that the National Trust (NHT) will offer a range of measures to assist persons who have lost their jobs or whose income flow has been disrupted.
"These involve suspension of mortgage payments, reduction in monthly payments, rescheduling of mortgage payments, extension of the mortgage period and reduction in interest rates," said Golding. "The exact treatment to be applied will vary from case to case and will be dependent on the peculiar circumstances of each borrower."
He encouraged people with NHT mortgages to avoid having their arrears mount by contacting the NHT and working out arrangements with the state agency.
"I have instructed the NHT to assign adequate personnel to deal with those borrowers who may need to seek this assistance," said Golding. "But I urge those who are not so affected to pay their mortgages. That is the only way we will be able to assist those who are in difficulty."
He also said that the Government would, effective January 1, increase from 90 to 180 days the period after which private mortgage lenders are allowed to have non-performing loans on their books.
"This will remain in place until the current economic crisis is behind us," he said.
The prime minister also said that effective today, people who have shipped barrels and packages with personal effects valued at less than US$3,000 will not pay duty once they are cleared or arrive in the island before December 31.
Golding also noted the effect of the financial crisis on the bauxite/alumina sector worldwide and said that his administration has been in "intense discussions" with the firms here and the unions in order to avoid plant closures.
"The Government has had to offer certain concessions and we may not be able to avoid a cutback in production, but we are doing everything possible to keep the plants in operation and save the jobs of the workers in the industry," said Golding.
http://www.jamaicaobserver.com/news/...F_PACKAGE_.asp
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