Tax incentive to fast-track growth in downtown Kingston
Published:Thursday | November 25, 2010 | 12:00 AM
Daraine Luton, Senior Staff Reporter
THE HOUSE of Representatives has approved a tax-incentive programme for downtown Kingston which is intended to stimulate development in the capital city.
In piloting the bill on Tuesday, Finance Minister Audley Shaw said investors who have moved into the dilapidated business district have done so on the basis of promised tax relief.
"The investment programme that has not started in downtown Kingston has commenced on the promise that these amendments will be made by us in the Honourable House," Shaw said.
"Our multilateral partners are aware of the Government's commitment to stimulate investments in these blighted areas," Shaw said.
Investors will receive tax credit of 33.3 per cent on capital expenditure in respect of improvement works carried out in the area.
Inventors were already benefiting from 25 per cent, and Shaw has acknowledged that no research has been done to evaluate whether the existing incentive programme has worked.
The decision of the House also paves the way for investors to benefit from stamp duty and transfer tax on the acquisition of land for use under the act.
The House has also doubled rental deduction for lessees, that is, lessees of properties owned by approved developers would be allowed to claim double the rent as a deduction in arriving at statutory income.
South St Andrew MP Dr Omar Davies and Central Manchester representative Peter Bunting, who both supported the bill, questioned whether the original tax inventive for downtown Kingston worked.
"What we are simply doing is doing a little more here ... . I do not know that any analysis has been carried out as to what we need to reinvigorate investment downtown as opposed to formal residential areas. It seems they need to be carried out on a more scientific basis," Davies said.
Shaw conceded that he has not seen an evaluation on whether the existing incentives have worked. But he said, "The proof of the pudding is in the eating.
"The truth is that the reality of what is on the ground is that we have seen the response in terms of incremental investment that we anticipated would come about from the original tax relief act which tells us that we have to sweeten the pot quite a bit more," Shaw said.
Communications giant Digicel is among the investors to commence construction in downtown Kingston. The company is building its regional headquarters on the waterfront.