Gazette removal of GCT on imports post-haste, say farmers
Local farmers are breathing a sigh of relief with the removal of the general consumption tax (GCT) from all agricultural imports and many are planning to increase production because of the millions of dollars they will save.
Minister of Industry, Commerce, Agriculture and Fisheries Karl Samuda announced the removal of the tax on November 8. However the provision has not yet been gazetted to give it effect.
The Government will give up an estimated $4.2 billion per annum as a result of the tax removal.
"This amendment seeks to ensure that our farmers have access to modern equipment and inputs," Samuda said at the announcement.
For agriculturalist and representative of the pool of Jamaica Broilers Group poultry farmers, Downie Walker, the long-awaited move will save poultry farmer millions of dollars that can now be put into producing more.
"Right now, there are three tunnel houses on the wharf and the GCT is in excess of $25 million," Walker said of the potential savings to be realised by the farmers.
Walker lamented what previously existed, where "the GCT was on tractors, arrows, ploughs, poultry equipment, bee-keeping equipment and most everything used in the industry."
Only a few items such as machetes, hoes and files were exempt, he said.
"It is one of the greatest legislation. What it means is that people can go and invest," said Walker, adding that the farmers "are very upset" with the lag time in getting the removal gazetted.
Gleaner Business sought clarification from the Ministry of Agricuture on whether the GCT will be removed from domestic purchases, that is, where farmers make purchases from, for example, farm stores locally, but the information was not immediately available.
By Walker's reasoning, the matter is still being worked out by the ministry.
A SIGNIFICANT IMPACT
Additionally, the tax removal will "make a significant impact" on onion farmers, director general in the Ministry of Agriculture, Don McGlashan, told Gleaner Business.
Speaking of the cost to set up, McGlashan said farmers spend up to $700,000 to establish an acre of onion. Removing the GCT on items they need to import will put money back into their operations, he said.
"One of the biggest costs there is the irrigation equipment and accessories. The cost of an irrigation system, including fertigation, runs anywhere from $300,000 to $350,000 per acre. If you take off 16.5 per cent from that, you have a reasonable amount that has been expended," McGlashan said.
The farmer can now better capitalise his production system, which will lead to higher productivity at a lower cost of production, he added.
"It will increase efficiencies in the operation, so someone that is coming on board will do the numbers and see that this thing can really make some money," said McGlashan.
St Catherine bee farmer and supplier to the industry, Donovan Drummond, also lauded the move.
"Half of my income comes from imports," said Drummond, who supplies the complete range of bee equipment to farmers.
For Trevor Walker, who has been working to revive the Jamaica Union of Bee Farmers, the removal of the GCT from farming imputs will give an added boost to the industry and inspire others to join.