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IMF Structural Benchmark: Jamaica Will Miss Tax Bill Deadline

imf jamaicaJamaica will miss the deadline for tabling the Omnibus Tax Incentive bill, one of the structural benchmarks set out under the 48-month Extended Fund Facility with the International Monetary Fund.

The agreement calls for the bill, which when passed, will become the Omnibus Tax Incentives Act, to be tabled in Parliament by Sept. 30.

At Parliament’s final sitting for September yesterday, Finance and Planning Minister Dr Peter Phillips, in a statement to the House, said issues had arisen that would delay the timeline.

He said that following the first performance quarterly review in August, concerns were raised by local stakeholders and international partners about what was being proposed by the tax incentives working group.

The finance minister said discussions have been held with the IMF, and it was agreed that Jamaica would be given more time to work out and enact the required legislation.

IMF Resident Representative Bert van Selm, in a statement yesterday said, “Fund staff is aware of the advanced stage of the preparation of the Omnibus Tax Incentives legislation, and will continue to assist the Jamaican authorities to help ensure that the program objectives are achieved. In this context, the documentation regarding the first review of the program was delivered to members of the IMF’s Executive Board last week. The board is scheduled to meet on Sept. 30, 2013 to discuss the review.”

The new legislation will be far-reaching as it is expected to replace all incentive laws, including inducements applicable to firms operating in the free zones, an issue that has concerned members of the business processing outsourcing industry, Yoni Epstein, president of the Business Processing Industry Association of Jamaica, disclosed two months ago.

According to the IMF Country Report 13/26 on Jamaica, the Omnibus Tax Incentive Act, guided by technical assistance provided by the Inter-American Development Bank and in consultation with fund staff, will be tabled in Parliament by September 2013.

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