Corporate taxes

Increased taxes pushed inflation in April.

Jamaica’ business sector paid 39 percent more taxes to government than projected, for the year to September, with $23 billion collected in corporation taxes resulting from a $6.5 billion increase ahead of forecast.
For the 2017 fiscal year, $16.4 billion was raked in, to September while $52 billion in corporate taxes was paid by the business sector for the full twelve months. Special Consumption taxes on local goods rose 50 percent above forecast with a $5 billion increase while local GCT grew 6 percent or $2.6 billion and travel tax jumped 26 percent or $2 billion above the amounts budgeted earlier in the year. Tax on interest fell $2 billion below forecast to $5 billion and was the only major area of underperformance

Jamaica’s Ministry of Finance newest office building

Revenues for the government of Jamaica continues to outperform forecast with inflows rising $15 billion more than the amount projected, bringing the half year take to $262 billion.
Expenditure underperform projections by $3 billion as interest cost fell $2 billion and the wage bill fell $1 billion.
Government operations ran at a deficit of just $620 million in September, but for the year to date, a surplus of $5 billion. Interestingly, the capital expenditure that have struggled to keep pace with forecast, is down by just $144 million with $18.3 million having been spent. The primary surplus, one of the major target under the IMF agreement, came in at $62 billion or $17 billion better than planned.

Jamaican economy throwing up goodies

The Jamaican economy seems to be humming along pretty well, based on a number of critical measures that are available as well a physical evidence seen elsewhere.
There seems to be increased traffic around the corporate area at various times of the day, even when school is closed, thus reducing much of the normal peak hours traffic. Information from the Tourism sector is that visitor arrivals have climbed sharply since the winter months. There is strong evidence of increased construction activities with buildings be constructed across the length and breathe of Kingston and elsewhere in the country for commercial and residential purposes.
An examination of government’s statistical data is confirming some of these developments. Corporate taxes are up 33 percent over 2016 for the first 3 months of the fiscal year, an indication of higher sales and profit being generated. Education tax is running 7.7 percent ahead of projections and 13 percent above last year’s intake. Contractors levy is up over 2016 by 27.5 percent ahead of forecast, to reach $391 million and some 33 percent ahead of the intake for 2016 of $293 million, a good indicator of the health of the construction sector.
Traditional Exports are holding their own but with a slight fall in earnings for January to April 2017 of 1.5 per cent or US$3.4 million below the comparable 2016 period to US$216 million, but Non–Traditional Exports in the same period grew 36.2 percent or US$51 million above the US$140.9 million earned in the 2016 to reach US$192 million. Traditional exports should get a boost in the second half of the year with the resumption of alumina production at Alpart. Another critical indicator of increased health of the local economy is the second largest number of persons employed within a one year period of 35,500, for the twelve months to March 2017, only bettered by increased employment of 40,500 more persons between March 2015 and 2016,

The Hampshire Apartments complex being built by Guardian Life.

this number could have be swollen by persons employed due to the general elections that were held in February and staid on until sometime after. The 2017 numbers of newly employed, compares favourably with 2007 with 36,500 newly employed, 2006 with 41,900, 2005 with 35,500, but well below the 72,700 newly employed between April 2002 and 2003. Bank credit has expanded to one of the fastest pace for some time with an increase of 17 percent to $495.759 for banks excluding that was not so clarified in 2016. The growth is well over the approximately 4 percent inflation over the period.
Of course, business confidence is at record levels, as investors pump more investments into the local stock market, driving it to new record highs on the last day of July, with increases expected in the months ahead.
Recent data in the forex market shows it generating strong net inflows with the local currency enjoying some revaluation after a slight fall earlier in the year.