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IMF review mission in Jamaica this week

Published:Sunday | February 2, 2014 | 12:00 AM
PHILLIPS

Gary Spaulding, Senior Gleaner Writer

Updating Parliament on the 2014 economic agenda last week, Minister of Finance and Planning Dr Peter Phillips said the next International Monetary Fund (IMF) review mission to Jamaica will begin on Wednesday of this week.

Phillips told the House of Representatives that this mission should be completed by February 14.

He said it would be assessing the country's performance for the quarter ending December 2013 and the outlook going forward.

"Our assessment indicates that all quantitative targets and structural benchmarks for the December quarter have been met," he told the House.

Phillips noted that the second review of Jamaica's economic programme (April to September 2013) by the IMF board was approved on December 18, 2013.

He said this included an update of the quantitative criteria through September 2014, as well as the addition of specific commitments related to tax reform, streamlining incentives, improving the business environment, financial sector reform, and the strengthening of the social protection framework.

Phillips told Parliament that the IMF board approval resulted in a drawdown of SDR (special drawing rights) 19.97 million (US$30 million) by Jamaica, bringing the total drawdown from the Fund to date to approximately US$270 million.

MORE BUDGETARY SUPPORT

"The positive second review also facilitates access to loans from the World Bank and the Inter-American Development Bank of approximately US$270 million by way of budgetary support," he said.

At the same time, Phillips has promised Parliament that third-party information would be forthcoming before the end of March. He said this was in keeping with the Government's commitment to strengthen tax administration.

"Beginning this quarter, Tax Administration Jamaica will implement the third-party information provisions of the Revenue Administration Act, 2013, on a phased basis," Phillips said.

As such, Phillips said starting April 2014, businesses in selected sectors will be required to submit detailed information relating to their depositors, independent contractors, suppliers and business customers.

KEY TASKS

Phillips reiterated that among key tasks going forward and to be undertaken in the current quarter are legislative amendments for the enhanced fiscal rule; tax reform; and other legislative reforms, including the passage of the Omnibus Banking Act.

With the Government having developed and submitted to the IMF in August 2013 a conceptual framework for the design of legally binding fiscal rules, Phillips reiterated that the enhanced fiscal rules will seek to bolster fiscal transparency, ensure a sustainable budgetary balance, and consolidate the gains of fiscal consolidation.

"The transparency and automaticity of fiscal adjustment will be enhanced by an explicit, time-bound adjustment path to sustainability," said Phillips. "In that regard, legislation to enable adoption of these fiscal rules will be enacted by the end of March 2014."

He stressed that enactment of the fiscal rule means that Parliament will have a greater responsibility in the management of the fiscal affairs of the country, which will mean even more serious engagement by parliamentarians about fiscal issues.