Mon | Mar 30, 2020

CDB wants COVID-19 tax breaks for private sector

Published:Wednesday | March 25, 2020 | 12:19 AM

The Caribbean Development Bank (CDB) is making the case for regional governments to provide tax relief to the private sector, even as it stands ready to provide financial assistance to weather the onslaught of COVID-19 which is ravaging Caribbean economies.

That call came from president of the CDB, Dr Warren Smith, during last Friday’s virtual vice chancellor’s Forum hosted by The University of the West Indies via its UWItv platform and moderated by Vice Chancellor Ambassador Richard Bernal.

Smith also underscored the importance of managing foreign-exchange reserves carefully at a time when most countries would see significantly reduced inflows of foreign exchange, arguing that the focus by policymakers must be on containment.

“The so-called flattening of the COVID-19 curve needs to be associated with policies and procedures that limit the future adverse impacts on our population – social distancing, safe hygiene practices and so on which will mitigate the increases of these cases.

“Support provided to the economy at this time must be carefully balanced against the demand and supply of foreign exchange reserves, since most regional economies have high marginal propensities to consume imports from every dollar that is spent,” Smith warned.

The CDB president reaffirmed the call for governments to support the private sector.

“One way in which governments can support the private sector is through temporary tax breaks and wage tax relief as automatic stabilisers, affording them greater access to foreign exchange, financial intermediaries providing relief for forbearance to borrowers to ease the liability crunch,” he appealed.

christopher.serju@gleanerjm.com