Budget probe

As members of parliament (MPs) gear up to pose questions to portfolio ministers today about the Government’s $1.4-trillion Budget during a two-day meeting of Parliament’s Standing Finance Committee, two sector groups have highlighted issues they want addressed during the deliberations.

Kathryn Silvera, president of the Jamaica Manufacturers and Exporters Association (JMEA), is asking how the Government will justify the increase in the proposed environmental levy which, she argues, will see manufacturers charged a levy on 100 per cent of their sales value, while importers pay the levy only on the cost of imported inputs. This, she said, creates a structural advantage for imported finished goods over locally manufactured products.

With geopolitical developments in the Middle East likely to push global oil prices upwards, resulting in increased electricity costs for manufacturers, while simultaneously generating additional government revenue through fuel taxes, Silvera wants the administration to disclose what measures are being contemplated to protect the competitiveness of energy-intensive productive sectors.

On the matter of the public-sector wage bill and productivity, the JMEA boss said that while the country remains committed to achieving the 60 per cent debt-to-GDP target, the public-sector wage bill is now approaching 13 per cent of gross domestic product, raising concerns among private-sector leaders about long-term fiscal sustainability.

Silvera wants the Government to comment on what concrete steps it intends to take to contain the wage-to-GDP ratio, while simultaneously improving productivity and efficiency across the public sector – particularly in agencies that directly affect the ease of doing business, such as customs, licensing and regulatory approvals.

CONSIDER MSMES’ ISSUES

At the same time, Cordell Williams, president of the Young Entrepreneurs Association of Jamaica (YEA), is urging policymakers to ensure that the realities facing micro, small and medium-sized enterprises (MSMEs) are carefully considered as they discuss the revenue measures and other Budget-related matters for the 2026-2027 fiscal year.

Williams highlighted a number of initiatives announced by the Government aimed at strengthening fiscal sustainability, including the application of general consumption tax on digital services, adjustments to special consumption taxes, an increase in the Environmental Protection Levy, and other measures designed to increase revenue and support national recovery efforts following the Category 5 hurricane last October.

While fiscal stability remains essential for Jamaica’s continued progress, Williams said the global economic climate is becoming increasingly uncertain. She said rising geopolitical tensions, disruptions in international supply chains, and potential volatility in global oil markets could significantly affect the cost structure of Jamaican businesses, many of which are still struggling to rebound from the effects of Hurricane Melissa.

The YEA president noted that small and microenterprises, in particular, remain highly sensitive to increases in transportation, logistics and electricity costs; and that policies that support energy resilience, renewable energy adoption, and improved access to financing will be critical to helping entrepreneurs navigate potential global disruptions.

“As Jamaica continues to strengthen its fiscal position, it is important that small businesses, the backbone of our economy, are given the time, tools, and support needed to adapt to new measures. Practical implementation timelines and policies that strengthen energy and financial resilience will help ensure our entrepreneurs can continue to grow even amid global uncertainty,” she added.

The YEA is urging the Government to ensure that implementation timelines for new fiscal measures are practical and realistic for small and microbusinesses, many of which operate with limited administrative capacity.

Williams said a phased approach to implementation, accompanied by clear guidance and adequate transition periods, will help ensure that businesses can adapt to new requirements, while continuing to contribute to job creation, innovation and economic growth.

The Standing Finance Committee comprises all 63 members of parliament, who are expected to comb through the pages of the Budget today and tomorrow.

edmond.campbell@gleanerjm.com