Finance and Public Service Minister, Dr Nigel Clarke has committed to abolishing the asset tax, which still remains imposed on financial institutions.

In his first budget presentation back in April, Minister Clarke announced the abolishment of the asset tax payable by non-financial institutions but kept the imposition of the tax on financial institutions.

However, in response to a question from the Jamaica Observer at a press conference at the Ministry of Finance and the Public Service, Heroes’ Circle head office last Friday, Minister Clarke committed to abolishing the tax on financial institutions.

The planned abolishment of the tax comes in the midst of his Economic Growth Council, chaired by billionaire and NCB Chairman Michael Lee Chin, identifying the high cost of capital and high banking taxes including the 33 per cent corporate tax and asset taxes among a list of 111 call to action items to spur growth in the economy.

The banking sector, in particular has blamed the asset tax for increasing their operating costs, thereby inhibiting their ability to reduce interest rates to customers which would boost economic activity. Minister Clarke was hesitant to say when exactly the tax will be abolished.

Prompted by Sunday Finance to indicate whether the abolition could come in the next budget cycle in April, Minister Clarke remarked, “that would be very premature now considering that we are just in September.”

Dr Clarke told the contingent of journalists in attendance, “there is a lot of evidence to suggest that the asset tax that was levied on the financial sector under the International Monetary Fund (IMF) Extended Fund Facility has in fact increased the cost of credit and therefore isseen as an impediment to growth.”

http://www.jamaicaobserver.com/sunday-finance/asset-tax-for-financial-institutions-to-be-abolished-jamaica-to-remain-fiscally-responsible-post-imf_175345