Sun | Mar 24, 2019

Bankers concerned over Gov't's new revenue measures

Published:Thursday | April 24, 2014 | 12:00 AM

The Jamaica Bankers Association (JBA) has indicated it is concerned that the Government has not presented a more equitable and sustainable strategy to meet the shortfall in revenue for the 2014-2015 fiscal year.

In a release yesterday, the JBA said it was specifically concerned about the proposed levy of $2.25 billion by the Government on withdrawals from deposit-taking institutions and encashments from securities dealers.

"The levy may discourage some individuals and businesses from utilising the formal banking system, which not only conflicts with the country's aim to achieve greater financial inclusion, but encourages greater activity in the informal economy," the JBA said.

The JBA said it was also concerned with the Government's decision to raise an additional $1.79 billion, with an increase by 80 per cent of the asset tax for deposit-taking entities regulated by the Bank of Jamaica.

"The solution cannot be to impose repeated and increasing demands on the financial sector that is the most compliant and one of the largest contributors to tax revenues," the JBA said.

"As it stands, financial institutions are already subject to the higher rate of corporate income tax at 33.3 per cent, compared to 25 per cent for other companies. Financial institutions also suffer much higher rates of asset tax, compared with all other companies. These same financial institutions have already supported the Government's debt-reduction strategy through the Jamaica Debt Exchange and the National Debt Exchange."

The JBA said it was its considered view that a more prudent and equitable strategy would be for the Government to strengthen its efforts to increase tax compliance.