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Opposition suggests some companies using junior market to hide from taxes

Published:Tuesday | October 18, 2016 | 10:08 PM
Dr Phillips stated that he was not convinced that the companies listing on the market were truly trying to raise equity to expand in line with the government’s objectives.

Opposition spokesman on finance Dr Peter Phillips has declared that some companies are using the junior stock exchange to avoid paying taxes.

He made the assertion while speaking in the debate on amendments to the Income Tax Act to restore the original incentives granted to companies listed on the junior market.

Dr Phillips stated that he was not convinced that the companies listing on the market were truly trying to raise equity to expand in line with the government’s objectives.

He explained that he’s doubtful because some of the companies do not try to raise significant amounts when they go public.

The opposition spokesman on finance is of the view that the tax break should be given to persons who want to invest and grow the economy and not companies.

 

Opposition Spokeman on Finance, Dr Peter Phillips

However, state minister in the finance ministry, Fayval Williams, countered that the low capital target in an initial public offer by companies listing on the junior market could simply be a strategy used to ensure that a large number of shares are not sold too cheaply at first.

 

State Minister in the Ministry of Finance, Fayval Williams

Meanwhile, Williams informed that a mechanism is in place which will ensure companies cannot leave the junior stock exchange until at least five years after the incentive period ends.

The Bill was passed by the House and will now go to the Senate.