JISCO gets a pass on bauxite levy, but not income tax
The Ministry of Finance and the Public Service has now advised Auditor General Pamela Munroe Ellis that Chinese outfit Jinquan Iron and Steel Company, which operates the Alpart plant in St Elizabeth, has been granted a waiver of the bauxite production levy for five years.
Munroe Ellis had raised concerns that a Fiscal Policy Paper tabled earlier this year indicated that the waiver would have ended in March 2018, but was still in effect and has altered the levy collections significantly.
In her examination of the interim Fiscal Policy Paper for 2018-19 tabled in Parliament in September, the auditor general noted that the finance ministry subsequently advised that the agreement with
Jiugang International Resources Singapore Company Limited, a subsidiary of the JISCO Group of China, would see the mining company paying income tax, but would be provided with a waiver on the levy.
The waiver extends over the life of the agreement, which ends December 2021. It covers bauxite or laterite - a soil and rock type rich in iron and aluminium - extracted or won by Alpart in any calendar year in excess of 1.45 million tonnes of alumina actually shipped.
The five-year waiver was previously disclosed by former Finance Minister Audley Shaw in the wake of an IMF review of Jamaica.
In its April 2017 country report on Jamaica after conducting the first review under the current standby agreement, the International Monetary Fund was critical of the revenue loss from discretionary waivers, citing "leftover exemptions on the bauxite levy" as contributing to the estimated 0.1 per cent fallout relative to GDP.
The grant of the waiver means that the Government will be giving up about US$14.6 million in revenue annually, which equates to nearly $1.9 billion.