Opposition’s initiatives for MSMEs a step in the right direction, says Leckie
Published:Friday | March 14, 2025 | 12:09 AMEdmond Campbell/Senior Parliamentary Reporter
Michael Leckie, former president of the Small Business Association of Jamaica (SBAJ), says the proposal by the parliamentary Opposition to exempt new micro, small, and medium-sized enterprises (MSMEs) from corporate income tax for an initial period of five years, with the possibility of a five-year extension, was a step in the right direction for the sector.
“When you free up the working capital and give us space to reinvest in the company, it gives you more leverage to retool,” Leckie told The Gleaner.
He also welcomed the proposal to allow MSME borrowers to pay fees and other costs associated with sums borrowed from the Development Bank of Jamaica (DBJ) over the life of the loan to avoid having to find the lump sum payment up front.
In his contribution to the Budget Debate on Thursday, Julian Robinson, opposition spokesman on finance, said the proposed tax waiver would provide greater financial flexibility for MSMEs to grow and develop.
Robinson said that following its launch, businesses that started before its implementation and were still within their first one to three years of operation will also be eligible for the exemption.
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“This policy will encourage MSMEs to enter the formal economy, allowing them to access government support and institutional benefits without the immediate burden of corporate income tax,” Robinson said.
A future PNP government would also carve out a portion of the government-funded projects for MSMEs, he added.
According to Robinson, a PNP administration will ensure that a specific percentage of government projects is earmarked for MSMEs through a competitive procurement process.
“This policy will create more opportunities for MSMEs to participate in the formal economy, stimulate local entrepreneurship, and drive sustainable economic growth,” he said.
He noted that MSMEs struggled to access government procurement opportunities, securing only 1.1 per cent of government contracts.
“This prevents small businesses from benefiting from state-led economic activity, further limiting their growth potential,” he said.
Addressing access to finance by MSMEs, the opposition spokesman on finance said only 17 per cent of players in the sector can access credit from banks while 53 per cent rely on personal savings to fund their operations.
He said this lack of financing severely limits their ability to expand, invest in new technology, or hire skilled employees.
Robinson also said a new PNP government would reform the loan structure at the DBJ to make accessing loans more attractive for MSMEs.
“The Government may claim that DBJ is already providing loans to MSMEs, but the reality is that millions of dollars earmarked for MSME financing go unused each year because the cost of accessing these loans is simply too high,” he said.
According to Robinson, the current fee structure at the DBJ acts as a major disincentive, preventing small businesses from securing the funding they need.
He noted that the DBJ facility currently excludes micro-enterprises that earn $15 million or less in annual revenue. This, he said, further limits access to much-needed financing.
“The PNP will backload the loan amount with these fees and allow the borrower to pay over the life of the loan and not have to face the need for finding that lump sum up front,” he said.
He also pledged to expand DBJ loan access to include micro-enterprises, ensuring that businesses with annual revenues of $15 million or less can also benefit.