The Government is to give increased tax relief to business operators who move their bases into downtown Kingston in the hope of bringing life back to the once-vibrant financial district.

Yesterday, Finance Minister Audley Shaw told The Gleaner that already one major company is planning to invest heavily in downtown.

"We do have one major private company that is going into downtown Kingston and it will be building a twin-tower down there," Shaw said. "By next year, cement should be pouring."

The Bruce Golding administration has repeatedly said it is on a drive to attract businesses back to downtown Kingston and, on Monday, the Cabinet approved a number of initiatives for operators.

Information Minister Daryl Vaz said the tax relief and other incentives would be facilitated by changes to the Urban Renewal Tax Relief Act (1995).

The act is designed to encourage and facilitate development in areas plagued by dilapidation, blight or urban decay and, Vaz said, the Government would be leading the way.

Increased interest

"It is proposed that the Ministry of Foreign Affairs is to lead the charge on the Government side by building and setting up offices in the downtown Kingston area," Vaz said.

Shaw also said several private-sector companies have begun to show interest in either leasing or renting abandoned buildings in downtown Kingston to restore and open for business. He also said the Bank of Jamaica was committed to putting up another building in the city.

"Based on the vision that we have, in two years' time, you will see at least four major high-rise buildings in downtown Kingston," Shaw said.

Vaz has said there are several other private-sector companies that are waiting on the incentives to relocate their head offices to downtown Kingston.

Among the changes coming will be an increase in the investment tax credit from 25 per cent to 33.33 per cent.

The Cabinet has also approved accelerated capital allowances for owners of buildings in areas such as downtown Kingston.

This will allow owners of buildings in the heart of the city to claim capital allowance over two years rather than for the life of the assets.

In addition, owners of properties in downtown Kingston will be allowed to claim double the rent in arriving at statutory income.

Special incentives will also be granted to companies which move their head offices to downtown Kingston.

They will be allowed to deduct costs incurred to generate income in arriving at their statutory income while paying a reduced corporate income-tax rate for the central management service which is provided to groups of companies located outside the island.

The Government has announced that no more public-sector entities will be allowed to move out of the downtown Kingston area.

It is not the first time that Government has announced major plans for downtown. In the recent past, such plans have failed to get off the ground. In 1995, then Prime Minister P.J. Patterson announced a renewal plan for downtown Kingston which had a similar tax-relief programme embedded.

Meanwhile, Shaw said he recognised that crime was a major deterrent to people setting up business in downtown Kingston but stressed that attacking urban blight was one way of reducing the scourge.

He added that very soon extortion, which has become a staple of the business community, will have to disappear.

"We have to substitute extortion with jobs. This country will have to be rescued from extortionists and it has to be done soon," Shaw said.