Mahfood opposes tax reform proposals

Chief executive officer of Jamaica Teas Limited, John Mahfood, has weighed in on the tax reform proposals made by the Private Sector Working Group (PSWG), suggesting that removal of the waiver for junior market companies was inimical to economic growth.



"They need to go back to the drawing board,” said Mahfood, adding “I think they have missed the point."



He was speaking with the Financial Gleaner following Jamaica Teas’ annual general meeting at the Knutsford Court Hotel, St. Andrew earlier today.



The PSWG last week outlined proposals to raise J$7.3 billion in new revenue annually for Government through 145 tax-reform measures aimed at widening the tax net while reducing the burden on corporations and the poor.



The measures include slashing by half the taxation on wealthy corporations from 33 per cent to 15 per cent, slashing tax on employees earning under J$1.1 million to 15 per cent, while eliminating tax waivers and removing most items currently exempt from the general consumption tax.



The group remains in discussions with the Jamaica Stock Exchange (JSE) and Jamaica Hotel and Tourist Association about the removal of 10-year waivers allowed junior-market companies and hospitality businesses.



"They don't recognize that this avenue for new companies is very important to the development of business in Jamaica,” said the Jamaica Teas chief executive, whose company was listed on the junior market of the JSE in 2010.



“When these shareholders bring more business to Jamaica they employ more people," Mahfood added.



"The fact is we are getting benefit, but what is the impact to the country? he asked.



“Prior to 2010 people had no place to invest except in government paper or overseas. If they remove it (the waivers), in five years time what will the Jamaica business community look like?" Mahfood asked.



"The have to look at it properly because the benefit to the country far outweigh the cost," he said.



"I think they are missing the point. They need to answer the question as to why no company was listed between 2000 and 2010," said Mahfood about those firms listed on the JSE junior market.



marcella.scarlett@gleanerjm.com