ICT/BPO players hail new no GCT regime
Mark Titus, Gleaner Writer
WESTERN BUREAU: STAKEHOLDERS IN the information and communication technology/business process outsourcing (ICT/BPO) industry have welcomed the passage of a bill in the Senate to remove general consumption tax (GCT) from goods purchased locally for use in free zones.
Under the new regime, goods and services purchased in Jamaica for use in free zones will no longer attract GCT. Prior to this, operators in the free zones were not required to pay GCT on imported goods, but if the same product is acquired locally, GCT at the standard rate of 16.5 per cent was applied.
"This is a move in the right direction and will certainly have a positive impact on the cash flow of operators in the free zone," said Gloria Henry, manager of Montego Bay Free Zone. "It may also have some implication on our attractiveness to overseas investors, in terms of their bottom line, so it is a plus for the sector."
According to Senator Mark Golding, who piloted the bill last Friday, "The inescapable outcome of this anomaly is a significant disincentive for free zone operators sourcing supplies locally."
Yoni Epstein, chairman of the Business Processing Industry Association of Jamaica, was said to be travelling when The Gleaner tried to make contact with him.
However, Davon Crump, CEO of Global Outsourcing Solutions Limited, a local player in the ICT/BPO sector, has lauded the move by the senators, and agrees that this augurs well for locally owned businesses.
"The levy on items purchased in Jamaica has always been a deterrent to my firm supporting local businesses. So such a decision will go a long way in boosting our confidence while encouraging other investors to Jamaica," said Crump, the immediate past president of the Montego Bay Chamber of Commerce and Industry. "This is very good for our country's development."
Changes have also been made to allow micro, small and medium-size enterprise sector (MSME), businesses which record sales of less than $3 million to register under the GCT Act, while manufacturers are also now able to claim refund on some inputs, which, if imported, would have qualified for exempt customs duties.