THE EDITOR, Sir:
IT MAY well be that had the Minister of Finance not granted Desnoes & Geddes a 5-year tax break, the planned $1.5b upgrading would not proceed. If this level of tax relief is necessary to facilitate further investment in an established, profitable enterprise, then something is wrong with our taxation policy that must be addressed for all investors, not just Desnoes & Geddes.
If there are peculiar circumstances that justify this concession then it should be made available as a matter of policy to all investors to whom such circumstances apply.
To forego $2b in taxes in return for $1.5m in investment suggests that ultimately the Jamaican taxpayers are not only financing the full cost of the investment but providing an extra $500m in working capital.
I am surprised that there has been no official statement on the matter by the Minister of Finance. It cannot be proper for the Minister to be able to write off $2b of tax revenue without even informing Parliament and allowing the people's representatives, if they are so minded, to question and comment on the matter.
For example, how does the Minister justify providing $2b of relief to a company that not only recorded pre-tax profits last year of $1.3b but is financing this investment not from loans but from its own cash reserves? Where does this leave the new local brewing company which has just invested in a plant to compete with Red Stripe? Are their profits to be taxed while their competitors enjoy a tax holiday?
And where does it leave the many other businesses that have invested in upgrading, expansion or new ventures and are constantly being harassed by the revenue collection agencies?
This deal requires much more explanation. Apart from the lack of transparency and accountability with which it has been handled, I consider it to be wrong in principle and bad in practice.
I am etc.,
BRUCE GOLDING
brucegolding@yahoo.com
P.O. Box 13
Kingston 6
Via Go-Jamaica
