Economic overview
In 2021, the country came out of the recession due to the COVID-19 pandemic. Before the crisis, the usually low growth rate was on the rise, while unemployment and underemployment were decreasing, fueling widespread crime linked especially to drug trafficking. Economic reforms have made it possible to keep inflation and deficits under control; IMF, World Bank and Inter-American Development Bank have granted substantial loans linked to the initiation of reforms (fiscal and structural in support of growth) and debt reduction.
The main agricultural production is sugar cane, from which, in addition to sugar, a prized rum is obtained. A typical crop of the island is allspice (pepper).
The country is one of the world’s largest producers of bauxite (fields in Ocho Rios, Kirkvine, Nain and Ewarton, where alumina production plants are located). Kingston has an oil refinery and some chemical plants.
Other industries include textiles (in Ariguanabo), tobacco, paper, cement (Rockfort), food. The tourism industry, despite the problems linked to crime, remains an important source of foreign currency, as well as the remittances of emigrants.
Main sectors of industry
Agriculture, once Jamaica’s economic base, has taken a back seat thanks to the development of mining and the expansion of tourism. However, agriculture remains important in the cultivation of sugar cane which occupies about 15% of its territory, and from this a highly prized rum is obtained, and obviously bananas are grown. Other commercial crops are tobacco, coffee, cocoa, citrus fruits, coconut palm and various spices, including ginger and allspice or allspice, almost exclusive to the island.
The local food sector is very limited, in fact products based on cereals, potatoes, cassava, etc., are imported from abroad.
Completely neglected is the exploitation of forests, which also cover 16.9% of the territorial surface and are rich in precious essences. Livestock farming (cattle, goats and pigs prevail) and fishing are also scarcely practiced, however, it provides very valuable lobsters.
However, the real wealth of the country are the bauxite deposits. The difficulties encountered on the market by bauxite and sugar cane have consequently caused a severe economic crisis. It should be noted that alongside the traditional sectors, linked to the transformation of agricultural products (sugar mills, oil mills, tobacco factories, breweries, canneries, rum distilleries, etc.), the country now has various plants for the production of alumina, textile and chemical plants. and petrochemicals, a major cement factory, a tire factory, etc.
Business. Foreign trade is lively, mainly with the United States (about 1/3 of the total), followed by Great Britain, Venezuela and Canada; however, there is a certain increase in the exchanges between Jamaica and the other members of CARICOM, the Common Market of Caribbean countries, in which Jamaica is trying to establish itself as a supplier of agricultural and industrial products. Exports mainly concern alumina, bauxite, sugar and bananas, while imports are mainly represented by fuels, various products, food products, machinery and means of transport, etc .; trade denounces a chronic deficit, of the average order of 20%. The trade balance deficit, however, is covered by the significant contributions of tourism, which is, after bauxite, the largest Jamaican currency source: in 1989 the tourist contribution was provided by over 1.1 million visitors attracted by a very mild climate and with natural beauties, to which is added an excellent hotel equipment.
Taxation for businesses in Jamaica
There are few cases of exemption applied, which in any case almost exclusively concern residents or the proceeds of listed Jamaican companies. The taxation system is quite extensive, also covering the real estate, tourism and services sectors. There may be forms of exemption from paying taxes for a period of time (ranging from a minimum of 5 years to a maximum of 10 years) for the start of those activities that make a contribution to the local economy, creation of jobs work, etc.
Tax Company Income
For both corporate and personal income, capital gains are not subject to taxation. Instead, the incomes of non-resident companies discount the same flat rate of 33.33% as the resident ones, and to avoid double taxation, in some cases a kind of exemption must be requested for those paid elsewhere.
For personal income, the rate is 25%. Capital gains from companies listed on the Jamaican stock exchange are instead tax free.
Import tax
There are taxes both as import duties which are variable, and VAT with a rate of 16.5%.
International agreements
There are numerous bilateral tax agreements, but Italy (which still confirms Jamaica in the black list) does not appear, at least for the moment, in the list of countries with which agreements have been reached to avoid double taxation. The countries concerned are, all those of the Commowealth, and more specifically: the United States and Canada, the United Kingdom and Israel, the Caribbean Community, the People’s Republic of China, Denmark, Norway and Sweden, France, Germany and Switzerland.
Investing in Jamaica
We are talking about Jamaica, a state characterized by a high crime rate, poor, with a third of young people unemployed, with a growth rate that is around 1% annually. And then we think of its public debt equal to 140% of GDP.
With the spread of the phenomenon of globalization throughout the world, however, national borders are being surpassed. And, if trade becomes as global as it hopes for balanced growth, the institution such as the International Monetary Fund (IMF) intervenes.
It intervenes in the economic and development policies of countries: it imposes austerity plans with consequent cuts in public spending, layoffs and privatizations as a condition for accessing its own funds.
The loans disbursed by the IMF in favor of the state of Jamaica were by no means non-repayable: today the public debt of Jamaica has fallen to 126%.
Tourism Minister Hon Edmund Barlett said: “Jamaica is experiencing a time of strong growth in arrivals and earnings and this has attracted new investors. Today the island is a sought-after tourist destination, which is why many hotel chains are aiming for expansion and just as many are building new hotels on the island “.
The Hanover area will be invested in a $ 500 million project signed by Princess Hotels & Resorts for the construction of 2000 rooms, while the Hard Rock will open 1100 rooms to travelers in Montego Bay. In St. Ann, Karisma’s first phase of development will see $ 200 million invested in building 800 rooms, and Moon Palace has pledged to spend $ 160 million in building 700 new rooms. Recently, the S Hotel in Montego Bay opened 120 new beds and by the end of 2019 the Wyndam Hotel and the AC Marriot will open the doors of another 450 rooms in Kingston.
Outlining the project, the Minister of Tourism said he was satisfied with this great result. Taking note of the sustained growth, the minister also stated that Jamaica is an island strongly marked by innovation, which winks at new systems, processes and methodologies to meet all the needs of travelers.