Matalon urges customs duty reform at Caricom level

BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com

Sunday, October 12, 2014    

DISHONEST importers continue to mis-classify a raft of items including “synthetic hair” in order to benefit from cheaper duty, stated Joseph M Matalon on Thursday night.

As such, he wants Government to review tariffs that hike duty on primary products but slash tax on finished goods made from the same material, arguing that they impact the country especially as it relates to Caribbean Community (Caricom) imports.

“Articles of synthetic hair attract duty of 20 per cent, but articles of human hair attract duty of 5.0 per cent,” he said. “…and I must tell you, vast amounts [of human hair] were imported into the island,” said Matalon, who heads the Private Sector Working Group on tax reform and is also chairman of ICD Group.

Matalon was addressing the Jamaica Manufacturers’ Association (JMA) 46th Annual Awards Banquet at the Jamaica Pegasus Hotel in New Kingston.

Weave imports are set to hit $1 billion this year, based on growth over the last four years. The island imported US$7 million ($770 million) worth of the product in 2012, up from US$3.3 million in 2008, according to the International Trade Centre, an affiliate of the World Trade Organisation and United Nations.

“The complexity of our tariff structure and the number and wide disbursement of duty rates imposed, even within a single tariff, provide myriad opportunities for unscrupulous importers to mis-classify imports in an effort to evade legitimate customs charges,” explained Matalon, who gave another example of red kidney beans which attract duty of 40 per cent while red beans (processed) attract no import charge.

His reference was to trade mechanisms under the present tariff structure that, by and large, “impose protective tariffs on primary products” while allowing “low or zero tariff on finished goods of those same primary products”.

“In both cases I have cited, the rigidity of the current CET prevents us from undertaking reforms, from addressing these issues to the benefit of the economy and all its participants,” he said. “I have no doubt, if polled, that all the national customs departments in the region — with the possible exception of Trinidad [the largest Caricom trader] — would share this view.

“Surely, as the largest consumer market in Caricom, Jamaica can — and has a duty — and must demand that these issues be addressed through a reform process at the level of Caricom itself,” he said, eliciting applause from the roughly 500 guests.

Imports into Jamaica are greatest from the USA, followed by Venezuela and Trinidad & Tobago (T&T).

“In my own view, if we are to remain in the unit — not on the basis of sentimental historical inaction, but on the basis of true mutual benefit — then maintaining the status quo is not a serious option,” he concluded.

Last year, the JMA claimed that manufacturers from T&T were misrepresenting items as originating from within Caricom — which would entitle the goods to duty-free status. However, a rate of duty or common external tariff is applied on products originating from outside the grouping.

In fact, last year’s JMA guest speaker, former Industry Minister Claude Clarke, called for Government to suspend the CET for the duration of the Jamaica‘s International Monetary Fund (IMF) programme.

The Economic and Social Survey Jamaica 2012 indicates that Jamaica‘s annual trade deficit with Caricom narrowed to US$775.3 million relative to US$916.0 million in 2011. The improvement was attributed to a 22.4 per cent rise in exports to US$83.2 million and a 12.7 per cent reduction in imports to US$858.6 million.

On Thursday, Red Stripe was named Manufacturer of the Year to top off a night on which the brewery claimed five awards in total — more than any other company this year.

The other awards that went to Red Stripe included Champion Exporter in the category of large exporter, Digicel Business ICT, NCBJ Best Environmental Management, and Robert Lightbourne Skills & Productivity.

JMA President Brian Pengelley, in his address, said that local manufacturers were finding new markets, including Brazil, India, Africa and China and the Caribbean.

“There is a niche market for processed foods, beverages, indigenous high quality fashion. In South Africa there is demand for tea, coffee, beers and rice. In Cuba, our closest neighbour, there is demand for processed foods and beverages. Also opportunity is ripe for export to the French Caribbean including Guadeloupe,” Pengelley said.

Some of the larger awards included the Ray Hadeed Award for best small and medium enterprise, which went to Caribbean Flavours & Fragrances; the Eddie Hall Award for New Manufacturer of the Year went to Spring Vale Enterprise; the C Henderson Davis Award for Breakthrough Product of the Year went to Fersan Ltd. Champion Exporter medium size went to PA Benjamin, while Champion Exporter small size went to Honey Bun.

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Matalon urges customs duty reform at Caricom level

PCB lashes out over plans to reform ICC

LAHORE, Pakistan (AFP) — The Pakistan Cricket Board (PCB) yesterday lashed out over controversial plans to reform cricket’s governing body, describing the proposed revamp as unjust.

Moves to restructure the International Cricket Council (ICC) to hand power to India, Australia and England, the game’s financial powerhouses, were passed in principle during a board meeting in January.

In an in-house meeting, the PCB termed the proposed plan as “not in line with the principle of equity nor in the interest of game of cricket”.

Members of the PCB’s governing board said in a statement that they had serious concerns over the planned revamp proposed by the cricket boards of India, Australia and England to give their countries a greater say in the running of the game.

It comes after Pakistani cricket legend Imran Khan on Friday blasted the proposals, saying they would take the game back to the days of colonialism.

The PCB said it had asked chairman Zaka Ashraf to seek guidance from Pakistan Prime Minister Nawaz Sharif and “to apprise him on this matter of immense significance and of national interest, which will have wide-reaching impact on the future of cricket in Pakistan”.

The PCB said it had received a detailed presentation on the proposal, which it would discuss at the next ICC board meeting.

No international cricket has been played in Pakistan since 2009, when militants attacked the visiting Sri Lankan team, and Khan has warned the new proposals would hit his home country hardest.

South Africa, Pakistan and Sri Lanka are now the only three of the 10 ICC full members who are still against the report, which will next be put on the table at the ICC meeting in Singapore on February 8.

The plan needs approval from eight of the 10 ICC members.

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PCB lashes out over plans to reform ICC

Congresswoman welcomes Obama’s position on immigration reform

Wednesday, January 29, 2014 | 9:53 AM    

NEW YORK (CMC) — Caribbean American Congresswoman Yvette D Clarke has commended United States President Barack Obama for addressing comprehensive immigration reform in his State of the Union Address Tuesday night. 

During his address, Obama urged the US Congress to enact immigration reform that will allow the more than 10 million immigrants without legal status, including Caribbean nationals, to apply for temporary legal status and, eventually, United States citizenship.

“A policy of comprehensive immigration reform will also support our economy by preventing the exploitation of workers who lack legal status despite, in some instances, living in the United States for almost their entire lives,” said Clarke, the daughter of Jamaican immigrants, who represents the 9th Congressional District in Brooklyn, New York. 

“With legal status and an opportunity for citizenship, these workers will finally have the ability to benefit from the rights guaranteed to American labourers, and thus become full participants in our civil society,” she told the Caribbean Media Corporation (CMC).

Ahead of his State of the Union address, Clarke had written to Obama for second time urging him stop deporting Caribbean and other immigrants. 

Clarke, along with Arizona Congressman Raúl M Grijalva, appealed to the president to “respond to the crisis of deportation in the undocumented community.

“As your administration nears an astounding two million deportations, we write again to reiterate our initial request and inquire into additional steps the White House can take to provide relief to the millions of ‘Americans in Waiting’ , who live and work among us,” they wrote.

Clarke also told CMC that the continued deportation of Caribbean immigrants who lack legal status had resulted in many families being separated.

“This policy must end,” she stressed, adding that, with the US Congress currently debating immigration reform, “the practice of continued deportation risks the very men and women who will have the ability to apply for permanent legal status and citizenship under a new system of immigration”.

Grenadian American New York City Councilman Jumaane Williams also lauded Obama’s address, noting that he outlined a “bold, progressive agenda”.

Williams, who represents the largely Caribbean 45th Council District in Brooklyn, said that the agenda “re-focuses the nation’s attention on the need to end income inequality and to ensure increased opportunities for every American, including those who struggle to find work, those who came to the United States in search of a better life, and those who have not reaped the benefits in an economy that continues to leave many behind.

“Many of the ideas outlined in the speech, from extending unemployment benefits, increasing the minimum wage for those working for federal contractors, to ending wage discrimination against women, would benefit the constituents of the 45th Council District that I represent,” said Williams, chair of New York City Council Committee on Housing and Buildings. 

“And, as the son of Grenadian immigrants, and as someone who represents one of the most diverse districts in the city of New York, I am pleased that the administration will push for the right to a high quality education from preschool through college for all, regardless of where one is born,” he added.

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Congresswoman welcomes Obama’s position on immigration reform

Phillips urges support for govt’s economic reform programme

KINGSTON, Jamaica (JIS) — Finance and Planning Minister, Peter Phillips, is again urging national support for Government’s Economic Reform Programme (ERP), which he says aims to reduce the country’s debt, and set a platform for growth.

Speaking at the Manchester Chamber of Commerce’s Biz Clinic 2013 Forum at the Mandeville Hotel, on Thursday, July 25, Phillips, while acknowledging that the programme’s implementation was a pre-requisite for concluding the new US$932.3 million four-year International Monetary Fund (IMF) Extended Fund Facility (EFF), emphasised that it is also a “requirement for us to put our economy on a firm footing to achieve sustained levels of growth.”The programme, components of which have either been implemented or are currently being embarked on, aims to reduce Jamaica’s debt from the current 145 per cent of gross domestic product (GDP), to 96 per cent by 2020. These components include: attainment of a 7.5 per cent primary budgetary surplus target; implementation of a National Debt Exchange (NDX) programme; tax reform; and public sector reform, restructuring of salaries to reduce ratio to GDP from 10.6 per cent, as at March 31, 2013, to nine per cent by 2015/16. Saying that there is “a tendency on the part of commentators” to associate the programme solely with the EFF, Dr Phillips stressed that whether or not there was an agreement, “we need these economic reforms, primarily, because we have an unsustainable level of public debt.”“It is true that the pain generally comes before the gain, and we are in a period now where the stresses are being felt. But, it is also the case that we can see the prospects of the growth, which is the focus of the entire programme,” he noted.Dr Phillips pointed out that inflation outturn for the April to June quarter was 1.2 per cent, which fell below the two to three per cent forecast.  Additionally, he said the Net International Reserves  (NIR) stood at just over US$1 billion, representing approximately 13 weeks of goods and services imports. This figure, he said, was US$119 million higher than the outturn at the end of the January to March quarter. “The turnaround will not come instantaneously. But, I think it is important to recognise that there are important opportunities for us to even exceed what, admittedly, are moderate growth targets for the first phase of our programme,” the minister said. “We can…complain about all the things that could be different, or we can become part of the change. I want to urge all of you to inform yourselves and be evangelists for economic reform in the country,” Dr Phillips added.

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Phillips urges support for govt’s economic reform programme

Phillips urges support for govt’s economic reform programme

KINGSTON, Jamaica (JIS) — Finance and Planning Minister, Peter Phillips, is again urging national support for Government’s Economic Reform Programme (ERP), which he says aims to reduce the country’s debt, and set a platform for growth.

Speaking at the Manchester Chamber of Commerce’s Biz Clinic 2013 Forum at the Mandeville Hotel, on Thursday, July 25, Phillips, while acknowledging that the programme’s implementation was a pre-requisite for concluding the new US$932.3 million four-year International Monetary Fund (IMF) Extended Fund Facility (EFF), emphasised that it is also a “requirement for us to put our economy on a firm footing to achieve sustained levels of growth.”The programme, components of which have either been implemented or are currently being embarked on, aims to reduce Jamaica’s debt from the current 145 per cent of gross domestic product (GDP), to 96 per cent by 2020. These components include: attainment of a 7.5 per cent primary budgetary surplus target; implementation of a National Debt Exchange (NDX) programme; tax reform; and public sector reform, restructuring of salaries to reduce ratio to GDP from 10.6 per cent, as at March 31, 2013, to nine per cent by 2015/16. Saying that there is “a tendency on the part of commentators” to associate the programme solely with the EFF, Dr Phillips stressed that whether or not there was an agreement, “we need these economic reforms, primarily, because we have an unsustainable level of public debt.”“It is true that the pain generally comes before the gain, and we are in a period now where the stresses are being felt. But, it is also the case that we can see the prospects of the growth, which is the focus of the entire programme,” he noted.Dr Phillips pointed out that inflation outturn for the April to June quarter was 1.2 per cent, which fell below the two to three per cent forecast.  Additionally, he said the Net International Reserves  (NIR) stood at just over US$1 billion, representing approximately 13 weeks of goods and services imports. This figure, he said, was US$119 million higher than the outturn at the end of the January to March quarter. “The turnaround will not come instantaneously. But, I think it is important to recognise that there are important opportunities for us to even exceed what, admittedly, are moderate growth targets for the first phase of our programme,” the minister said. “We can…complain about all the things that could be different, or we can become part of the change. I want to urge all of you to inform yourselves and be evangelists for economic reform in the country,” Dr Phillips added.Like our Facebook page https://www.facebook.com/jamaicaobserverFollow us on Twitter https://twitter.com/JamaicaObserver

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Phillips urges support for govt’s economic reform programme

Holness speaks to JCC on dollar slide and tax reform

ON Tuesday, opposition leader Andrew Holness addressed the Jamaica Chamber of Commerce (JCC) board meeting on the issue of the Jamaican dollar and tax reform. He argued that while he was familiar with the economic arguments for devaluation, such as the need for the internal “rebalancing” of the economy, and admitted that “in the future it may be necessary”, he didn’t think such a policy should be pursued now.

He described “the policy of devaluation as poisonous to the Jamaican economy at this time”, and part of a “tacit agreement” with the IMF.Holness suggested that so far the Opposition had behaved in a responsible way, rather than “oppose, oppose, oppose”, so as to “avoid disruption”. Stating that in the context of the IMF deal, Jamaica’s “political climate was ripe for reform”, Holness assured that he “will support good policy”, but oppose bad policy.Addressing the issue of tax reform, Holness stated that “had we won the elections, we would have implemented comprehensive tax reform”, emphasising that in Opposition, “we took the risk of supporting comprehensive tax reform”, including supporting the position of the Private Sector Working Group on a uniform rate of GCT at between 10 to 12.5 per cent. He argued that the “unabated slide in the Jamaican dollar” since the election had been much more detrimental to the poor, and destructive to people’s standard of living, than a universal GCT, particularly as any such proposed reform should include increased social protection measures. In addition, in his view, there had been no compensating social protection measures to offset the slide in the dollar.Describing tax reform, Holness argued “in the hands of a butcher, it will kill you”, but “in the hands of a surgeon, it will save you”. Holness suggested that taxation was a very important signalling mechanism, and that he had reviewed the past two budgets, and couldn’t find one signal for investment. When in office, he said, the JLP had reduced transfer taxes, stamp duties, and removed the tax on dividends, as well as reducing some customs duties, and had planned to continue on a programme to reduce and unify some duties. In contrast, he said, the current government had just increased taxes.He was unapologetic in suggesting that the JLP stood for a Jamaica First position on Caricom, stating that he didn’t believe that one can have a strong Caricom with a weak Jamaica. He revealed that the JLP was still assessing this issue, and “that at a later stage will make statements on its position on Caricom”. His starting point was that Jamaica should seek true implementation of the treaty, meaning seeking remedies to deal with goods coming from outside the region but masquerading as Caricom imports and therefore coming in duty-free.Stating that “Economic growth must be private sector driven”, Holness argued that because Government accounts for about 70 per cent of procurement, a very important measure that would help private sector growth would be to pay suppliers for goods and services on time, preferably between seven and 14 days. “That simple action alone by Government committing to clear its bills on a timely basis would speed up the velocity of transactions in Jamaica. It would do miracles in improving access to credit”.Holness finished by arguing that he wanted to “unleash Jamaica as the next Singapore”. While arguing that it was positive that the society was strong enough to work together in a collaborative way to ensure that we have a successful economy and recover from serious recession, he observed that “in speaking to the different sector groups, that there is also a sense of uncertainty as to whether the sacrifices made both by workers and business will actually bear fruit”.In the question and answer session, he argued that we “don’t have the luxury of time anymore”, referring to the correct sequencing between tax reform and devaluation. He also observed that in the long term, it was his view that education was the most binding constraint on growth, even above, say, energy and access to credit. Jamaica doesn’t have oil, or a plethora of natural resources, so “Jamaica’s people is its oil”. For this reason, he had resisted the move to take away teachers emoluments, and teachers had got one of their largest increases under the former JLP government. He cited the example of when he was Minister of Education, a major business process outsourcing firm had wanted to hire 20,000 people. However, due to our low education standards, they told him that they had to interview 100 people to get 10. Finally, he observed that the JLP was forming an export strategy committee, to focus on how to increase exports.Opposition Leader Andrew Holness (right) addresses the Jamaica Chamber of Commerce (JCC) board meeting on the issue of the Jamaican dollar and tax reform. Looking on are JCC vice-presidents Catherine Kennedy and Warren McDonald. (PHOTO: ASTON SPAULDING)

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Holness speaks to JCC on dollar slide and tax reform