John Myers Jr., Business Reporter

Myers

The Jamaica Chamber of Commerce (JCC) has described the Jamaica Labour Party administration's first budget in two decades as reactionary, saying it was unlikely to stimulate economic growth.

But, JCC president Mark Myers also said it was close to the best budget that the finance ministry could have crafted given the fiscal constraints that the government has inherited.

"It is not a pro-growth budget and it does not seem to be, on the face of it so far, one that is out to stifle any particular industry although the automotive sector, which I know is crunching the numbers as I speak, are very very concerned," said Myers. "I think that it is a reactionary budget having to take into account what we all knew existed and many things that we did not know existed in terms of the finances of the country."

Not pleased

Still the trade association, which is made up of some of the island's most influential business leaders, is not pleased that the Government has opted to increase taxes through additional duties on tobacco products, firearm and motor vehicle licences and motor vehicle imports.

"The JCC is concerned that the increased duties only serve to add incentives to those that circumvent the system and apply additional pressure to the legitimate players in the formal sector of the economy," he said.

Myers, who is the managing director of Restaurants of Jamaica, owners of the KFC and Pizza Hut franchises in Jamaica, also repeated a call for the customs user fee (CUF), which initially was supposed to have been a temporary tax.

"We also welcome the proposed tax credit to reduce the impact of the customs user fee on the manufacturing sector. However, the impact of the CUF is felt not only by the manufacturing sector but the entire business community.... and the JCC again calls for the full removal of the CUF at the earliest opportunity," he said.

Welcomed amnesty

The JCC, on the other hand, commended the Govern-ment for containing the fiscal deficit to 4.7 per cent of GDP, which is lower than the revised fiscal target of 5.5 per cent and which bettered efforts made in the two previous years when those targets were missed.

The business group also welcomed the proposed tax amnesty, but expressed fears that the period might be too short and that there might not be enough incentives to lure tax dodgers into the formal framework.

Shaw's decision to increase the income tax threshold and remove the withholding tax on dividends from non-listed companies also found favour with the group.

john.myers@gleanerjm.com