New taxes, IMF negotiations concern business leaders

There is unease among some business leaders with indications by Finance Minister Dr Peter Phillips of an increase in taxes even as they throw their support behind the government as the country earnestly seeks to seal a deal with the International Monetary Fund (IMF) in the new year.

The business groups are particularly concerned that any increase in taxes to increase primary surplus by more than three per cent of gross domestic product on an already overburdened economy would be detrimental at this time.

The president of the Jamaica Manufacturers Association Brian Pengelley argues that the government should look instead at plugging gaps and loopholes in the tax collection system.

At the same time the business community is warning that investor confidence will continue to slip unless a deal is achieved soon.

This follows a statement by Dr Phillips acknowledging that there will be no IMF agreement by the end of 2012. The finance minister says discussions on technical issues were almost done, but that the completion of outstanding issues would determine when an agreement is approved.

President of the Private Sector Organisation of Jamaica (PSOJ), Christopher Zacca says it has given its full support to the finance minister, but says the support from his Cabinet colleagues needs to be more visible.

He says although the private sector maintains its support for the government, it must begin to share details of the negotiation with the business community so that it can offer the best assistance possible to shore up the government’s efforts.

Similarly, president of the Jamaica Chamber of Commerce, Francis Kennedy says even though the current situation is cause for concern, the full support of the country is needed. He says the situation is worrying, but urges Jamaicans not to panic.

Mr Pengelley says the government must outline what are the sticking points in the agreement.