The Government of Jamaica has put several measures in place to encourage new investments in the manufacturing sector, and has implemented mechanisms to improve the international competitiveness of local manufactured goods. This includes attractive incentives to investors, skills training, technology upgrading, and promotion of innovation through research and development. These programmes impact the economy by supporting and creating opportunities for linkages to other sectors such as tourism and agriculture.
Significant incentives are made available to investors in the manufacturing sector through:
The Export Industry Encouragement Act
This incentive offers to qualified firms 10 years\\\' income tax relief plus exemptions on duty for imported machinery and raw materials. To benefit from this incentive, a manufacturer must be a full exporter of manufactured goods (that is 100% of the goods manufactured are exported) or a partial exporter (a threshold of 5% of the goods manufactured are exported). A minimum of 5% of export sales to non-CARICOM markets must be attained. Benefits include ten (10) years income tax relief and exemption from Customs duties and GCT on imported raw materials and machinery.
The Modernization of Industry Programme
The Programme offers assistance to manufacturers adopting productivity-oriented techniques by granting exemption of General Consumption Tax on capital equipment. This is made available on a qualified basis through Jamaica Trade and Invest.
The Jamaica Export Free Zone Act
\'Free zone’ status enables manufacturers to benefit from income tax relief on profits and exemption from import duties and licensing. Manufacturers must be located within the designated free zones but firms located outside of the designated free zones may be allowed to benefit under the single entity free zone incentive. Firms are permitted to sell up to 15% of their production on the domestic market.
The Accelerated Depreciation/Special Capital Allowance
This allowance provides for the writing off of the cost of new capital equipment within a two-year period. A certified business is allowed to deduct 50% of the full cost of any new machinery in the year of purchase and a further 50% in the following year.
