Jamaican Government should give industry players moratorium on corporate tax, other deferments to set them back on their feet
Players in the entertainment industry in Jamaica have been decrying the damage wrought upon them with no aid or solutions proffered by the Government.
According to many their plight has gone largely ignored with the Government citing more pressing concerns.
Some observers hold the view that the Government is right to be vigilant and ensure that it is not business as usual due to the flare up in COVID-infections that have taken place as a result of mass gathering, particularly with parties and industry players not heeding protocols.
Be that as it may, the entertainment industry has had to bear a terrible toll because of the COVID-19 pandemic, with mass unemployment, significant losses and their businesses facing imminent collapse.
Entertainment plays an integral part in the social, cultural and economic fabric of Jamaica.
Economist and commentator Michael Witter at one time placed the value of the industry at US$2.5 billion, including its export component.
Howard McIntosh, chairman of the Entertainment Advisory Board, places the cumulative damage to the sector at J$195 billion with over 76,000 jobs affected.
It’s not just the larger entertainment companies that are taking a terrible beating, it’s the community bars, nightclubs, lounges and strip clubs that employ more than 30,000 people whose existence is now under threat and the J$28 billion this sub sector generates annually.
A definitive study needs to be conducted as to a more precise valuation and contribution of the entertainment, cultural and creative industries to the Jamaican economy. Some say it might be as much as 20 per cent of GDP.
Nevertheless, one gets the point – it is a significant sector that cannot be allowed to crater and be extinguished.
Scott Dunn, of Dream Entertainment, has vented his frustration and it is understandable. He must, however, be careful that he doesn’t appear to be solely concerned with his pockets and his company at the expense of the welfare of all Jamaicans.
Dunn and others in this space should be allowed to come up with a plan for the sector and options that can ameliorate the situation.
It is an international pandemic, a once in a century event, a virus that spreads quickly when people come into contact with each other. The entertainment sector, particular the party organising entities, are indeed agents of this disease and are veritable petri dishes for it. That’s very difficult to argue against.
The Government cannot just open up the country, allow people to “party-on” at will and damn the consequences. That scenario would condemn Jamaica to enduring poverty and make it a pariah in the international community, not to mention it would be a display of inept national governance.
What the Government can do is come to the sector and say ‘We don’t have the fiscal space to help you right now and we must put the welfare of all Jamaican before the survival of your industry but we can makes things a bit easier for you in the future. We can reduce your taxes over the next three to five years, we can make deferments when it comes to customs, permits and such. We can give you breathing space to reestablish yourselves’.
‘Perhaps we can put something in place somewhere in the last quarter of this year and certainly by the opening months of 2022. You have bled much and we are here to staunch the flow and facilitate your rehabilitation’.
People like Solomon Sharpe, of Main Event; Melanie Graham of Palace Amusements; Kamal Bankay of Dream; and Joe Bogdanovich of Downsound Entertainment; have invested and built sound businesses that have generated respectable revenue inflows.
It would be a shame to see them all continually suffer while the Government looks away.
Case in point, take Palace Amusement. For the nine-month period in fiscal year 2021, revenues came to just $95 million, down from $900 million for the same period in the previous year. It suffered a net loss of $254 million compared to a net loss of $49 million as at March 31, 2020.
Palace Cineplex in Liguanea and Palace Multiplex in Montego Bay, St James, have been forced into closure as a result of curfews, lockdowns and other COVID protocols.
It’s a bitter pill to have to swallow. Maybe it’s time to consider allowing more people into cinemas while ensuring they keep a safe distance for now. If your capacity was 300 in one space, perhaps 150 to 200 people can work, seeing the positivity rate has now fallen to four per cent.
A venerable company and good corporate citizen, Palace Amusement should not be allowed to go to the wall, particularly after the efforts made to abide by rules and regulations. There is something unjust about that.
Sharpe’s Main Event has definitely upped the ante over the last decade when it comes to the quality of events in Jamaica and the company has listed, encouraging the public to participate in its good fortune.
For the April quarter 2021, Main Event posted revenues of $173.5 million, a 40 per cent decline on the $287 million registered for the same quarter last year. Year to date, revenues show a 61 per cent decline from $855 million in 2020 to $349 million for the year.
This paints a picture of the magnitude of the hits these companies are taking due to no fault of their own. It certainly isn’t as a result of bad management, not understanding their market and being misaligned with their customers.
Surely something can be done to help them? Why should they have to sell parts of a business they have built over years at discount prices in order to merely survive?
Yes, it is not quite FINSAC and having to contend with 80 per cent interest rates, but it getting to something similar.
Back in 1996, former Prime Minister Edward Seaga, speaking before Parliament, said: “No one can forget the suffering and damage of this period: businesses fell apart; household budgets were abandoned; school careers had to be replanned; pensions became meaningless; tenants fought with landlords; thousands became newly poor and the life of the poor deteriorated to the ultimate level the poorest of the poor.”
A quarter of a century later, will a Jamaican government allow this to happen again. Is there nothing it can do?