Jamaica may not collect $1.9b for exempting bauxite levy

The Jamaican government is likely to lose nearly $1.9 billion annually for its decision to exempt on the bauxite levy. The government exempted bauxite levy as part of a tax regime overhaul for extractive industries, as reported.

The Financial Gleaner calculated the loss figure based on Global Finance’s 2017 estimate of Jamaica’s US$14.6 billion GDP and sourced from the IMF’s World Economic Outlook 2016.

According to the International Monetary Fund (IMF), “The recent decision to provide discretionary waivers by further widening leftover exemptions on the bauxite levy created a revenue loss of over 0.1 per cent of GDP per year, leaving the bauxite sector undertaxed and potentially undermining the hard-earned gains from the elimination of a range of tax incentives in 2014.”

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Finance Minister Audley Shaw said that the government has made the decision in order to keep the operations of Noranda bauxite in St Ann.  Shaw explained this was done in order to help China's Jiquan Iron and Steel Company (JISCO) to invest US$2 billion over five years in Alpart bauxite refinery in Nain, St Elizabeth.