POSITIONING OUR ECONOMY FOR GROWTH

By: DON DOBSON

Minister of Finance and the Public Service, Hon. Audley Shaw (left), and Inter-American Development Bank (IDB) Vice President, Mr. Roberto Velluntini, exchange signed copies of a Letter of Agreement for the bank’s provision of a US$520,000 (J$46.37 million) grant to the Government to undertake a Civil Registration and Vital Statistics Systems Modernisation Programme at the Ministry, National Heroes Circle, Kingston, on October 23.

At the beginning of 2009, the Ministry of Finance and the Public Service faced the daunting task of cushioning Jamaica against the impact of the global economic downturn.

“The Government is committed to positioning our economy to take full advantage of the eventual upturn in the global economy,” said Finance and the Public Service Minister, Hon. Audley Shaw, in January, as he addressed a ground- breaking ceremony for a business complex for Stocks and Securities Limited,  in Kingston.   

Mr. Shaw emphasised that in order to rebuild the foundation for a vibrant and competitive economy, the Government had designed programmes relating to “fiscal sustainability; efficiency of financial management and budget processes; reform of tax administration and revenue collection; education transformation; public financial and performance management; road infrastructure; and enhancing Jamaica’s competitiveness.”

The Minister also disclosed that the programmes were being implemented through the passage of appropriate legislation and the tightening of administration and accountability. 

“The programmes are designed to achieve a disciplined approach to fiscal and debt management; a sound predictable macro-economic policy framework; a simplified and competitive tax system; a modernised labour market, geared towards high levels of productivity; and a business-friendly bureaucracy with intolerance for corruption,” he said.    

Low Interest Loans

In keeping with this approach, the Ministry was able to secure a number of low interest loans, such as the World Bank’s fiscal and sustainability policy loan of US$100 million, to provide funding support for the Government’s fiscal and debt sustainability programme. The loan was geared towards containing and reducing debt, enhancing revenue, and increasing the efficiency of public sector spending and investment. 

Minister of Finance and the Public Service, Hon. Audley Shaw (left), cuts the ribbon to officially open the Tax Administration's Customer Care Centre, at the May Pen Revenue Centre, in Clarendon, April 2. Looking on (from second left) are: Minister of Transport and Works and Member of Parliament for Central Clarendon, Hon. Michael Henry; Manager of the Tax Administration's Customer Care Centre, Ms. Samantha Myers, and Mayor of May Pen, Councillor Milton Brown.

At the signing of the loan agreement on January 23, Mr. Shaw informed that the latest World Bank loan brings the amount of funding, which the administration negotiated over the past two months, to more than US$500 million. Other loans secured during that period included:  US$101 million in December 2008, and US$329 million, which was signed off earlier that month, both with the Inter-American Development Bank (IDB).

Against the background of the global economic downturn, and the funding negotiated, the Finance Minister said there was no need for panic and underscored the need for individuals to display confidence in the economy.

Other notable achievements in the loan/grant arena included an agreement for a grant from the IDB to fund an Energy Efficiency and Conservation Technical Assistance programme, valued at US$437,500 and a US$2.65 million (approximately J$230 million) grant contract signed between the Government of Jamaica and the Embassy of Japan, to reduce the incidence of crime and violence in high-risk and vulnerable inner-city communities.

Additionally, Jamaica is to benefit from US$4.3 million in grant funding under cycle six of the Caribbean Development Bank’s (CDB) Basic Needs Trust Fund (BNTF6), which is scheduled to commence in mid 2010.

Mr. Shaw noted that the sum brought to approximately US$9 million, the amount of funds which Jamaica has received under the facility. He said that to date, 22 projects have been implemented by the Jamaica Social Investment Fund (JSIF), “across a wide area of social need.”

These included the rehabilitation of inner-city schools, and other institutions, such as the Homestead Place of Safety in St. Catherine, and Point Hill Remedial Centre in Clarendon, under BNTF5, which is currently underway.

NIR Boosted

The Net International Reserves (NIR) of the Bank of Jamaica (BOJ) was boosted to some US$2 billion, or 16 weeks worth of imported goods and services, in September, after an injection of J$3.6 billion in budget support grants from the European Union (EU).

“(This) puts us in a strong position going forward, in respect of maintaining our overall confidence levels and, certainly, to continue to maintain stability in the exchange rate,” said Mr. Shaw.

Finance and the Public Service Minister, Hon. Audley Shaw (left), cuts the ribbon to officially open the newly established Large Taxpayer Office (LTO), at the St. Andrew Revenue Service Centre, Constant Spring, on April 8. Sharing the occasion (from 2nd left) are: Former Financial Secretary, Ms. Sharon Crooks; Director General of Tax Administration, Ms. Viralee Bailey-Latibeaudiere; Client Relations Manager at the LTO, Ms. Junie Walters; and General Manager, Mr. Dave Jeffery.

Tax Administration Reform

In the area of tax administration and reform, the Minister remained steadfast in his commitment to improve the country’s tax system.

“The new developments signal the Government’s continued commitment to facilitate businesses, modernise revenue administration, enhance fiscal prudence and promote good corporate governance,” he said at the launch of the Domestic Tax Administration Project, in January.

The Tax Administration Reform is concentrated on three main areas: promoting voluntary compliance; improving audit and collection enforcement; and simplifying customs procedures. The project seeks to consolidate the activities of the three departments, Inland Revenue, Tax Audit and Assessment and Tax Administration Services under the direct authority of a Commissioner General. 

To simplify the overall process of doing business in Jamaica, the  Government initiated steps to simplify the process of obtaining a Tax Compliance Certificate (TCC) required for several transactions in Jamaica, especially for businesses seeking to secure a Government contract valuing more than $250,000.  

This resulted in the Government electronically linking all the various agencies involved in the process of generating a TCC, eliminating the need for persons to go to each agency. The service has been offered to compliant taxpayers.

The service is to be enhanced to allow the Tax Administration’s Integrated Computerised Tax Administration System (ICTAS) to automatically interface with the computer systems available in the other agencies. This will make the service even faster and allow it to be offered to not only compliant taxpayers, but to all applicants.

In relation to infrastructure development, the Tax Administration of Jamaica opened the new, modern ‘one stop’ Savanna-la-Mar Tax Office, in Westmoreland, on June 11, to improve service delivery to clients and encourage greater compliance. The relocated office can now staff both the Inland Revenue Department (IRD) and the Taxpayer Audit and Assessment Department (TAAD).

Finance and the Public Service Minister, Hon. Audley Shaw (left), greets World Bank Special Representative in Jamaica, Mr. Badrul Haque (right), just before a brief ceremony on January 23, at the Ministry's Heroes Circle office in Kingston, to sign an agreement for a US$100 million loan facility for the Government. At centre is World Bank Director for the Latin American and Caribbean Country Management Unit, Ms. Yvonne Tsikata.

Other developments in the tax reform thrust included the opening of a new Customer Care Centre, which operates out of the May Pen Inland Revenue Department in Clarendon and the introduction of a new service, called ‘TAXREM’, which informs customers, who have signed up to receive text message reminders, that they need to renew their motor vehicle registration or make other payments.

The Government also established the Large Taxpayer Office (LTO), in Kingston, which caters exclusively to the key three per cent of the country’s taxpayers who are responsible for paying some 80 per cent of total taxes, annually.

Minister of State in the Ministry of Finance and the Public Service, Senator the Hon. Arthur Williams, told JIS News that tax reform would help to ensure that Jamaica develops a system that is simple, fair and competitive.

“The system, we believe, should promote economic growth and act as a vehicle for development, and it should be efficiently administered,” Senator Williams said, at the Tax Audit and Revenue Administration Post Graduate Diploma Programme’s graduation exercise, held on June 11, at the Knutsford Court Hotel in Kingston.

Public Service Modernisation

Meanwhile, in the area of the Public Service, great strides were made in modernising the Ministry, its agencies and operations, improving service delivery and improving human capital.

The Management Institute for National Development (MIND), in conjunction with the Ministry of Finance and the Public Service, developed a training course in human resource management for managers and supervisors from the public sector, in keeping with the third Memorandum of Understanding (MoU III), signed with the unions representing public sector workers. Approximately 3,000 public sector workers will be trained during the period 2009 – 2010.

Ms. Celia-Ann Sanderson (right), accepts her award for outstanding performance in the Tax Audit and Revenue Administration Post Graduate Diploma Programme, from Assistant Commissioner, Training, Tax Administration Services Department, Ms. Donna Sykes (left), at the Tax Audit and Revenue Administration Post Graduate Diploma Programme graduation exercise, held on June 12, at the Knutsford Court Hotel. Applauding (from left) are: Minister of State in the Ministry of Finance and the Public Service, Senator Arthur Williams; Director General, Tax Administration, Ms. Viralee Latibeaudiere, and Commissioner, Taxpayer Appeals Department, Mr. Winston Lawson.

Speaking at the official launch, former Minister without Portfolio in the Ministry of Finance and the Public Service, Senator the Hon. Dwight Nelson, noted that the Government recognises that there is a requirement for a workforce that is flexible, responsive and effective in delivering quality service in its various forms, “but it also recognises that there is a requirement for leaders to facilitate the transformation of our public sector human resources into proficient and motivated service deliverers.”

Similarly, as part of its modernisation programme, the Ministry’s Procurement Policy Implementation Unit (PPIU) continued its training and sensitisation programmes, to build the competencies of procurement practitioners in the public sector.

“What we have now is sustained training initiatives led by the Ministry of Finance and the Public Service and, as a next step in the modernisation programme, we have started work on establishing a training course at the Management Institute for National Development (MIND), for the further development of our procurement staff,” Senior Director at the PPIU, Mrs. Shirley Sinclair, told JIS News,  adding that between June and October, approximately 1,400 public sector workers were trained in  procurement discipline.

Additionally, she pointed out that Government entities continue to streamline procurement procedures to promote business activity and enhance the delivery of services to the public, as well as use standardised tender documents for consistency in the bidding process. The next step in the modernisation programme will see the Government introduce E-Procurement in 2010. 

Continuing with the theme of modernisation, the Jamaica Customs Department refined and revised its systems and procedures, moves which enhanced customer relations.

Minister of Finance and the Public Service, Hon. Audley Shaw (right), says something amusing to both Prime Minister, the Hon. Bruce Golding (centre) and the Head of the Delegation of the European Commission, Ambassador Marco Mazzochi-Alemani (left), after the signing of an agreement valued at J$3.6 billion from the European Union (EU), at Jamaica House, in Kingston, on September 1.

In an interview with JIS News, Director of Public Relations at the Department, Ms. Anneke Rousseau, pointed out that mechanisms have been put in place to facilitate e-payment, while the motor vehicle unit has been reorganised to make it more customer service-oriented, and ensure a shorter processing time for entries. “We are getting fewer complaints about the delay in processing entries…we have now been adopting a stricter approach to adhering to our charter standards,” Mrs. Rousseau said.

IMF Standby Facility

As Jamaica approaches 2010, the nation’s attention is firmly focussed on the Government’s negotiation of a US$1.2 billion standby facility with the International Monetary Fund (IMF). The facility has become necessary in the face of a fall-off of some US$1billion in the Government's revenues, consequent on the global economic downturn and its impact on key foreign exchange earners, such as bauxite/alumina and remittances.

Addressing the 15th annual International Development Partners (IDP) retreat at the Morgan's Harbour Hotel, Port Royal in Kingston, on November 24, the Finance Minister said the Ministry was in the "final stages" of preparing the Letter of Intent, which will form the basis of a formal agreement.