Mona School of Business & Management (MSBM) continued its business advocacy role by hosting a virtual public forum with the theme “Equity for Local Investors in Jamaica” on Wednesday, November 10, 2021. Featuring a high level panel, the presentations focused on the taxation treatment of local versus foreign investors in Jamaica’s stock exchange. It can be argued that there seems to be a discriminatory taxation treatment of local vs. foreign investors that penalizes the local, even at the Government policy levels. As a result, this has called into question, ‘Why should a Jamaican invest in the Local Stock Market?’
The presenters included Ms. Allison Peart, Director of A Peart Advisory Services Limited and MSBM Board Member; Mr. Winston St. Elmo Whyte, Chairman and Chief Actuary, Actman International Limited and Adjunct Senior Lecturer, Department of Mathematics, University of the West Indies (UWI), Mona; and Dr. Marlene Street Forrest, Managing Director, Jamaica Stock Exchange (JSE) and the session was moderated by Mrs. Vennecia Christian Barnes, Teaching Fellow, MSBM.
Dr. Marlene Street Forrest explored the background of taxation, the history of dividend tax, benefits of investment and the need to lobby for equity in taxation. "There has to be an avenue of stimulating the economy. There is a connection between taxation of dividends and the number of persons that are account holders and the increase in companies that are paying dividends, all of whom are being affected.” She noted that the government should explore how individuals and companies can benefit from the taxation of dividends which will also result in the stimulation of the economy. She further indicated that the JSE will continue to lobby for the removal of taxes on dividends.
In her presentation, Ms. Allison Peart examined taxation of dividends and capital gains in Jamaica, taxation of redemption gains from collective investment schemes, treaty dividend withholding tax rates and global minimum tax. Ms. Peart noted that it should be considered whether the 15% income tax rate on dividends earned by local Jamaican resident investors is appropriate. She also highlighted that consideration should be given as to whether there should be a 25% withholding tax on gains earned in collective investment schemes. “From a tax perspective, we need to think about how we are treating our local investors fairly, how we attract foreign investors and ensure they are not getting better than local investors and how we ensure that as investors we see Jamaica thrive”, she expressed.
Mr. Winston St. Elmo Whyte provided justification for his stance on zero taxes and penalties and numerous incentives. He noted that this will encourage individuals to save and invest as they already pay income tax if they are above or below the tax thresholds. Individuals will also build their wealth faster which will result in more capital available in the economy. He expressed, “I believe that this approach will lead to more rapid expansion of the capital market, an improvement in entrepreneurialism, create more wealth and long-term investable funds and it will also help to bring the small man into the picture of creating wealth rather than saving at very low interest rates.”
The virtual audience of approximately 120 persons who joined by both Zoom and YouTube engaged in a very spirited question and answer session which followed the presentations. Moderated by Mrs. Vennecia Christian Barnes, this segment clarified taxation law in Jamaica, differential treatment for small and large businesses, the Jamaica Stock Exchange and the treatment of pensioners.
This Public Forum is part of the continuation of several held by MSBM as part of its advocacy role to engender discussion on topical business and management issues.