Taxpayers line up inside a revenue centre in Kingston.
BUSINESS OPERATORS in Jamaica spend more than 17 days in lines each year to pay their taxes. In addition, businesses have to make 72 tax payments each year.
These are two of the factors which have weighed heavily against Jamaica, according to the World Bank's Doing Business Report 2010 issued last month.
The World Bank data show that in fellow Caribbean country, Trinidad and Tobago, businesses spend just under five days in tax lines and make an average of 40 payments per year, while in the United States, medium-size businesses spend approximately eight days in tax lines for 10 payments per year.
According to the World Bank, paying taxes is a major obstacle for persons doing business in Jamaica.
It's a fact not lost on Commerce Minister Karl Samuda. He said the sooner Jamaica is able to make paying taxes easier, the better it would be for the country.
"It is difficult for people to pay their taxes and it is seen as an impediment to doing business," Samuda told The Sunday Gleaner.
The country was ranked 75th by the World Bank in its recently released Doing Business Report 2010.
The ranking provides measures of business regulations and their enforcement across 183 economies and select cities at the sub-national and regional level. Jamaica was ranked 67th in the Doing Business Report 2009.
"We have lagged behind in the reform process and, as a result, the World Bank, through its own measurable standards, has signalled that we need to get those reforms going if we are to be viewed as a leading destination for doing business," Samuda said.
harder to start business
The World Bank has said it will be harder to start a business in Jamaica in 2010 compared to this year. The country has also slipped in the area of getting credit and protecting investors.
Speaking with The Sunday Gleaner last week, the commerce minister said, "We need to accelerate the pace by which we modify how we do business."
One aspect of reform that Government has promised is in the area of taxation. Finance Minister Audley Shaw had used his Budget presentation in April to announce plans to consolidate payroll taxes. The move was due to take effect on July 1 but has been put on hold.
The consolidation of payroll taxes, which was detailed in the 2004 Matalon Tax Reform Report, would free employers of multiple payments at different state agencies.
In stressing the need for ease of paying taxes, Samuda said, "We need to have a system where you make one payment to engage an entire transaction, other than what we are doing now. Right now we are going all over the place."
But the Opposition People's National Party is far from satisfied that Jamaica has improved as a place to do business.
"There is clearly a breach after two years," Ian Hayles, Opposition spokesman on investment, told The Sunday Gleaner.
unkept promises
According to Hayles, the Govern-ment has failed to implement any new strategy to make Jamaica a better place to do business.
"One of the planks of their manifesto was to create a more business-friendly environment, where more businesses can set up and where they are able to compete with other businesses across the world. This is a failure, this is an indictment on the part of the Jamaica Labour Party government," Hayles said.
However, Wayne Chen, president of the Jamaica Employers' Federa-tion (JEF), was less caustic in his assessment.
Chen said that progress has been achieved in recent months but noted that political will is needed to "deal with bureaucracy and red tape that still entangle the formal sector.
"The pace at which we recover from the financial malaise will depend on new investment, which will provide employment and provide production," Chen said.
The JEF president pointed to areas such as tax reform, the high cost of capital, security and the lack of readiness of the workforce as challenges to economic development.
He argued that as soon as the Government begins to address these issues, it would make Jamaica more investment friendly.
daraine.luton@gleanerjm.com