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Jamaicans to compete with other CARICOM nationals for jobs

Published:Tuesday | December 1, 2015 | 12:00 AMDaraine Luton

Industry Minister Anthony Hylton has sought to defend the position of the Government to confer the same level of priority for securing jobs in the proposed Special Economic Zones (SEZ), on both Jamaicans and nationals of other Caribbean countries.

The SEZ framework is a major piece of legislation needed for the positioning of Jamaica as a logistics hub economy. It makes provision for the creation of zones such as dry docks, bunkering facilities, air maintenance, and repairs or tank farms.

The bill, which was passed in the House of Representatives yesterday, saw a major amendment being made to the employment clause.

"The developer shall first offer employment to Jamaican nationals before other nationals subject to those Jamaican nationals meeting the requirements of the developer, including requirements regarding skills and competencies," the employment clause as printed in the bill read.

But in opening the debate on the bill, Hylton took his pen from his pocket and said that the word 'Jamaican' would be replaced with CARICOM.

However, Audley Shaw, opposition spokesman on finance, and Karl Samuda, the industry spokesman, expressed opposition to the suggestion.

"We are in Jamaica. We are promulgating a free zone act in order to promote economic development and to provide jobs, jobs, jobs for Jamaicans," Shaw said.

He noted that the unemployment rate was upwards of 13 per cent and that unemployment among young people was 34 per cent.

Hylton, however, said that Jamaica has an obligation under the Treaty of Chaguaramas to provide the same opportunities to nationals of other member states.

"As members of the Treaty of Chaguaramas, until that membership is excluded, you cannot, in a piece of legislation, simply say that Jamaican nationals (should get priority) as it would mean that there is discrimination against CARICOM nationals," Hylton said.

He pointed to the Shanique Myrie case, which, he said, indicates clearly that actions could be brought against Jamaica if a law that discriminated against CARICOM nationals were passed.

Hylton, who hissed his teeth when Shaw suggested that the amendment should not be accepted by the House, said that Shaw was engaging in "jingoism" and "playing politics".

Shaw, having being dissatisfied with Hylton's explanation about the treaty obligations, said he would be taking the matter on the political hustings.

"Jamaicans must get top priority to jobs in their country," he said. "I will deal with you on the political platform. I will fix your business on the platform," he said.

Meanwhile, Hylton said that he would have loved to have seen greater fiscal benefits being given to players in the SEZ.

The bill is seeking to repeal the Jamaica Export Free Zone Act and put in place a framework for the operations of Special Economic Zones.

Among other things, entities operating in SEZ will pay 12.5 per cent income tax. The standard income tax rate for businesses is 25 per cent.

Samuda said that the tax rate should be no higher than eight per cent, nothing that under the free zone laws, income tax rate is zero.

He argued that the business process outsourcing (BPO) could be wiped out as a result of the tax.

"It is sending a signal that is not necessary," Samuda said.

He said that the rate was "very discouraging" and "it is not going to redound to the benefit that should accrue to the whole exercise".

But Hylton said that the Government had consulted with the BPO and that the current rate represented a compromise.

"I am not here to suggest that, particularly as it relates to the fiscal measures, that personally, as the minister of industry, I would not like to see more being done. But this is the judgment of the Ministry of Finance and the Cabinet as to what can be done at this particular moment in time," Hylton said.

Hylton said that the fiscal considerations are influenced by the country's fiscal state. He also said that while the headline rate is 12.5 per cent income tax, tax benefits and other deductions make the effective rate 7.25 per cent.