Samuda seeks to pacify firms amid incentive cuts
Published:Sunday | March 13, 2011 | 12:00 AM
Dionne Rose, Business Reporter
Karl Samuda, minister of industry, investment and commerce, has sought to allay fears of manufactures and exporters who warned last week that tens of thousands of jobs could be lost if the Government presses ahead with plans to eliminate the Modernisation of Industry programme (MoI).
The programme allows producers to import capital equipment, used to retool plants, as well as raw material.
"No decisions have been taken on the regime," said Samuda on Friday. He said the Governement would not cause the manufacturers any undue discomfort.
Samuda was responding to a joint press release on the impending changes, issued earlier this week by the Jamaica Exporters' Association (JEA) and the Jamaica Manufactures' Association (JMA).
According to both groups, they were "perturbed by and disappointed in" the Government's announcement that it would end the incentive programme on March 31, and adjust the duty regime for raw materials.
"The decision has the potential to affect 77,000 jobs and approximately 300,000 dependants," said the trade associations, pointing out that there had been no consultation on the policy change.
"There is much talk about tax reform to stimulate production, however, it is ludicrous that to date, the Government has not met with the producers," said the release.
But when pressed, Samuda again pointed out that no final decisions had been made and that Minister of Finance Audley Shaw was in discussions with the Inter-American Development Bank (IDB) on the way forward.
"The regime might alter, but the matter is not yet concluded," said Samuda.
The change in the MoI regime was announced via press advertisement in early March, which indicated that there would be no further granting of incentives in the form of waivers for the GCT payable on the acquisition of capital machinery and equipment used in the manufacturing process.
New policy
The advertisement said that any future concessionary treatment for the acquisition of capital machinery and equipment would be addressed in the new tax waiver/incentive policy and strategy currently being developed.
As to the timeline for implementation of the new policy, Samuda said only it would be "very soon".
The advertisement said that in order to facilitate applications for incentives prior to the freeze of the waiver of taxes under the MoI, all applications would now have to be submitted to JAMPRO by March 14 for processing to be submitted to the Ministry of Finance and the Public Service by March 18.
Meanwhile, the validity of waivers obtained by the Ministry of Finance and the Public Service as at March 31 would not extend beyond September 30.
The JEA and JMA are insisting that Government extend the MoI until there is full disclosure and consultation on the new regime — a proposal, which, they said, has been put to the Government.
"When the associations realised that the deadline for the ending of the MoI was fast approaching, we called for a further extension until the Government could disclose and consult on the new regime to facilitate manufactures and exporters with the intention to modernise," said the release.
"The notice published in the March 6, 2011, Sunday Gleaner clearly indicates that this has not been accepted."