JN chairman urges gov’t to step up the pace with asset tax removal
JN Group chairman Oliver Clarke.
JN Group, which re-organised as a mixed conglomerate in 2017 is calling for reductions in asset tax so its commercial banking arm can make a greater contribution to economic growth.
Chairman of the company, Oliver Clarke in the JN Group annual report, released this month stated, “the high cost of capital and banking taxes, including the 33 per cent asset tax, inhibit our ability to reduce interest rates, which would, in turn, spur growth in the economy.”
Clarke said that the removal of the tax would immediately facilitate more funds being made available in the financial sector for customers to access.
He is also calling for the continued lowering of cash reserve ratios, extending this to more financial institutions.
“Once again, we propose that the government lowers the cash reserve requirements for financial institutions which provide financing for student loans, small business loans, mortgages and agriculture loans.
He added, “this reduction would release more funds to deposit-taking institutions to on-lend to customers, thereby supporting the expansion of credit to businesses and households.”
Clarke expressed optimism that the proposals may be gaining traction.
“We have seen signals that these proposals are finding merit in the right quarters; and, therefore, it is anticipated that during the 2019/2020 financial year, our lobbying efforts will bear fruit.”
He also noted that at the end of the 2018/2019 financial year, the government announced the abolition of the asset tax paid by non-financial institutions; and its intention to extend this to financial institutions as well.
The Bank of Jamaica (BOJ) also reduced the cash reserves requirements for deposit-taking institutions twice, effectively releasing more funds to enable greater access to credit for businesses and households at lower rates and on better terms.