By Balford Henry, News EditorIMPORTERS ARE waiting anxiously for tomorrow's closing statement in the 2003/04 Budget Debate from Dr. Omar Davies, Finance and Planning Minister, on the controversial four per cent cess on imports.
The cess on imports of capital goods and raw materials continues to be of major concern to importers since the announcement by Dr. Davies in his opening Budget speech on April 17.
Yesterday, while leaders of the business sector were meeting in Kingston with the minister on the issue, representatives of the business sector in Hanover and Westmoreland were raising similar concerns at The Gleaner's Editors' Forum, at the Kibo Hotel, Savanna-la-Mar.
"We don't know the total outcome of this because there are meetings still going on in Kingston, but the private sector has made its concerns known to the Government. (Even) when we know what's going on, it's not going to be very good for anybody," said Rex Gadsby, chief executive officer of Savanna-la-Mar-based Grace Processors Ltd.
NO REFUND OF CESS
The Gleaner later spoke with Beverley Lopez, president of the Private Sector Organisation of Jamaica (PSOJ), who met with Dr. Davies yesterday. She said that arising from the meeting, the minister had decided to deal with any possible compromise to the cess when he closes the Budget debate in the House of Representatives tomorrow.
Mrs. Lopez said it was her understanding that there would not be a refund of the cess when importers file their income tax returns. Rather, the cess would be used as a credit against any amount of taxes due. This contrasted with the view expressed at the Editors' Forum, where contributors said they expected a refund, at some stage, after the payment of the cess.
Dr. Davies had said in his initial statement that the cess would be treated as credit against income tax when the importers file their tax returns.
The cess, one of the main topics at the forum, was condemned by the business community.
"It is a backward step," said Andrew Gray, of Gray's Pepper Products, Savanna-la-Mar. "First of all, it assumes that you're going to make a profit and that is not necessarily the case."
He said that the 15 per cent tax on packaging material would have to be added to the four per cent cess.
"It will have to be paid up front and that will have a negative effect on our cash flow and, right now, I am already having a cash-flow problem. So this is just an added burden and I think it should be reconsidered," Gray said.
Mr. Gadsby felt that the more serious repercussion was the "social problems" that will flow from the imposition of the taxes.
"It is going to create more unemployment, it is going to increase the cost of whatever we try to sell. So, at the end of the day, there is going to be more people out of work and I just don't know where it is going to stop, because it is bad enough."
Other speakers suggested that the agro-industry would be so badly affected, "it is going to be non-existent in the near future."
It was felt, too, that the agricultural sector would have to be particularly addressed "as a lot of farmers out there just cannot afford it".
And even tourism, the prized foreign exchange earner, would be affected said Kenric Davis, head of the Negril Chamber of Commerce and manager of the Sunshine Village Complex, Negril.
"I think we are shooting ourselves in the foot," he suggested. "If you apply a tax of four per cent to raw material, you're definitely going to push up the cost to the consumer." He said it would be felt "tremendously" in the tourism sector.
He said that if the cess was implemented there would be increases in room rates. Consumers would suffer most and "consequently, I don't see this thing having any positive effect at all".
