PNP's tax promise hollow
Published:Wednesday | September 22, 2010 | 12:00 AM
THE EDITOR, Sir:
THE OPPOSITION'S promise of tax breaks for business sounds hollow when you consider the dim state of the economy it left three years ago, the even darker state in which the People's National Party (PNP) says it now is, and the prospect of utter ruin that it envisages at the end of the present government's term. If this situation be true, then where will a new PNP government find resources to afford tax breaks?
According to Gleaner records for 2007-08, Mr Davies "... presented a deficit for the fiscal year (excluding debt amortisation of $102 billion), which appears to be close to $37 billion." And he said, "In a deficit target of 4.5 per cent of GDP (gross domestic product), we require revenues and grants of $241.4 billion." Since tax breaks were not then considered nor affordable, they can be realised only if there is growth and stability, more productivity and less reliance on loans and grants. This is precisely what the PNP says is not happening; so how are we to going to get the promised tax breaks? Serious people must demand an explanation.
Lending agencies
While we are on the subject, it might be useful to recall that the present administration addressed the issue in December 2008 when it announced the re-engagement of multilateral lending agencies such as the World Bank and Inter-American Development Bank, to gain access to longer term loans at a lower interest rate cost. These efforts resulted in the government securing US$350 million, with further plans to receive an additional US$600 million by the end of the fiscal term in March 2009.
There was also the plan to provide $350 million for small- and medium-size businesses via the Jamaica National Small Business Loans Ltd; $150 million for lending to small businesses through the Jamaica Business Develop-ment Centre at a 10 per cent rate; $150 million at a similar rate to credit unions for similar type lending. A mandatory 15 per cent of total procurement offered by government agencies was said to be reserved for small businesses and microenterprises.
Serious people must insist on and ensure that the present administration live up to the flesh and bone of this promise before thinking about a shadowy promise that says nothing about how it is to be achieved.
I am, etc.,
KEN JONES