Tax incentive big boost for companies on JSE Junior Market — Shaw
KINGSTON, Jamaica (JIS) — Companies listed on the Jamaica Stock Exchange (JSE) Junior Market are reaping dividends from the accompanying Government tax incentive, which is also generating benefits for the country, according to Finance and Public Service Minister, Audley Shaw.
The regime sees the firms benefitting from a 10-year tax break. For the first five years, entities are exempt from paying corporate income tax, but are required to pay 50 per cent of their statutory obligations for the remaining period.
Shaw said that the benefits are manifesting in areas such as exports and information and communications technology (ICT).
He noted that the 30 entities, representing 34 listed securities, have generated significant equities market capitalisation ranging between $3 billion and $56 billion over the eight years since the junior market’s establishment in 2009, resulting from the sale of shares to the public.
Shaw said the capital inflows have, for the most part, been channelled by company principals into expanding the entities’ operations, with a number of those involved in manufacturing either venturing into or expanding their export portfolios.
This, he noted, has contributed to boosting Jamaica’s exports out-turn, particularly within the last year.
“So, it is not surprising that in January of this year, we have seen a 31 per cent growth in exports compared with January of last year…moving from US$87 million to US$113 million. You can directly link that to some of the new shoots that are being created in the export sector and, in part, to the establishment of the junior market,” the minister added.
Shaw also lauded ICT firms, such as tTech Limited, for listing on the junior market, which is serving to strategically reposition technology within the economy, citing it as a “key component” in driving the Government’s growth agenda.
The minister said he is also pleased with ICT stakeholders’ growing interest to contribute to the economy by assisting local manufacturers with the necessary inputs that will better position them to either penetrate or further consolidate their foothold in the export market.
Shaw noted that by virtue of their listings, the companies have also recorded significant increase in the value of their shares, pointing out that these have averaged 575 per cent over the junior market’s duration.
Notable among these, he noted, are the Lasco Group, Access Financial Limited and Knutsford Express “which have grown much more aggressively” than some of the other listings.