Thu | Mar 22, 2018

Time not right to end junior market perks - PSOJ

Published:Friday | January 29, 2016 | 12:00 AM
William Mahfood (right), president of the Private Sector Organisation of Jamaica (PSOJ), speaks with Glen Christian (centre), CEO of CariMed, and Andrew Fazio, director of business process outsourcing and hospitality for the business arm of the new company, Cable and Wireless Business Solutions, during the PSOJ President's Forum breakfast held Tuesday at The Jamaica Pegasus hotel in New Kingston.

Dennis Chung, chief executive officer of the Private Sector Organisation of Jamaica (PSOJ), has argued that the March 31 deadline given for the end of tax concessions for new listings on the Junior Market of the Jamaica Stock Exchange is much too soon.

Chung said that he believes that a study should be done to look at when the best time to end the programme of incentives would be but is adamant that now is not the right time.

Addressing a PSOJ President's Forum on Wednesday, Chung said: "We need to look at how the economy is progressing and at what point your economy is sufficiently mature and developed to sustain itself but right now, you need something. Some studies would have to be done, maybe it's a year, maybe it's two years. But we have to do something to encourage people to come into the formal sector."

The junior market was introduced in 2009 to encourage the growth of small and medium-size enterprises and provides full relief from income tax for the first five years and 50 per cent for the second five years, plus exemption from tax on dividends and stamp duty on the transfer of shares.

To date, 28 companies have listed on the junior market.

In 2013, the Government announced a transition period for the phasing out of the special scheme of income tax incentives enjoyed by companies listed on the junior market.

This forms part of the tax reform measures required under the International Monetary Fund (IMF) economic reform programme being implemented by the Government.

Private sector interests have been lobbying for the transition period to be extended.

Former Prime Minister Bruce Golding has called for the Government to revisit its decision to phase out the tax incentives.

PSOJ President William Mahfood, adding his voice to the lobby efforts, noted that significant investment had been made since the introduction of the junior market.

This, he said, has been facilitated by the tax holiday that is granted to companies that list on the junior market.

Mahfood, who was speaking publicly on the issue for the first time, said: "Those incentives that are proposed to be removed. What I think would be important is the Government has to realise that those types of programmes are what will grow the economy in a short period of time."