MSME Alliance pushing for two-year tax exemption on profits for new entrepreneurs

 

A two-year tax exemption on profits for new entrepreneurs will be one of the issues on the table when president of the MSME Alliance Antoinette Hamilton meets with Finance Minister Fayval Williams.

 

Ms. Hamilton says she expects the sit down will happen shortly.

 

The MSME Alliance is pushing what it terms a sustainable move, in response to Prime Minister Andrew Holness's announcement of the ASPIRE Jamaica initiative, a policy framework aimed at driving economic growth.

 

Ms. Hamilton argues that, with data indicating that globally, companies usually fail within their first two years, removing the taxes required to operate their businesses will give new entrepreneurs a chance at survival. 

 

"Because the government is on a drive for significant economic growth, which the Prime Minister has alluded to, we believe that removing the tax on profits of SMEs and MSMEs in their first two years will allow them to migrate from that two years into three and four and five. We also believe that because MSMEs face such a great challenge in accessing financing, for example, generally banks don't give unsecured loans if your business is less than two years. Additionally, even though the DBJ facility is there, it excludes the micro-sector, so those are businesses that earn below $15 million," she sought to explain. 

 

Ms. Hamilton said a limited liability company pays 25 per cent tax on profit, while for others it is payroll taxes.

 

But she said the profits can be re-invested into the businesses, which can lead to growth that will benefit the economy. 

 

"We're saying allow them to reinvest back into the business, allow the business to grow. That will allow them to employ persons. We believe that that is a more sustainable approach than some of the approaches that are being discussed right now," she suggested.      

 

Ms. Hamilton, who was a guest Thursday on TVJ's Smile Jamaica, said the tax exemption can encourage more small businesses to enter the formal system.