URGENT: Gov’t Under Pressure to Scrap Asset Tax – JMMB Demands Action Now!

Amidst the turbulent waves of the COVID-19 pandemic, financial institutions have stood as pillars of support for the Jamaican government. However, now is the time for reciprocation. Keith Duncan, the Chief Executive Officer of JMMB Group Limited, recently called upon the government to phase out the asset tax, highlighting the sector’s unwavering assistance during challenging times.

1. Financial Sector’s Support During Pandemic
   • When the pandemic hit in 2020, JMMB and other financial institutions collaborated with the government to postpone a planned reduction in the asset tax. Originally meant to be halved in 2020, this tax was a crucial source of revenue for the government.
2. Negotiations with the Government
   • Despite the initial plan to reduce the asset tax, Keith Duncan and other industry leaders recommended retaining the tax due to unprecedented uncertainties caused by the pandemic. This decision was aimed at providing the government with necessary fiscal space to navigate the challenges posed by COVID-19.
3. Concerns About the Tax
   • Duncan described the asset tax as a "distortionary tax," emphasizing the burdensome nature of its impact on financial institutions. The existing fiscal adjustments, according to Duncan, should provide sufficient room for phasing out this tax.
4. JMMB’s Perspective
   • Duncan highlighted JMMB’s substantial contribution, revealing that the company paid $1.4 billion in asset tax for the current fiscal year. This amount exceeded the dividends distributed by the company, reflecting the significant financial burden imposed by the tax.
5. Broader Sector Struggles
   • Beyond the asset tax issue, Duncan shed light on the broader challenges faced by the financial sector. Factors such as volatile capital markets and high-interest rates have contributed to losses among institutions, further underscoring the need for government support.

In conclusion, it is imperative for the government to honor its commitment to phase out the asset tax, as originally planned. By alleviating this financial burden on the sector, the government can foster a more conducive environment for stability and growth. As the financial industry continues to weather challenges, collaborative efforts between the government and financial institutions are essential for ensuring a resilient and sustainable economic future.