The World Bank has just released one of its Flagship Reports, and one which the Jamaican public and private sectors always pay close attention to. It is entitled: Doing Business 2017 and is subtitled, on a hopeful note, Equal Opportunity For All. The full report and accompanying datasets are available at http://www.doingbusiness.org
How did Jamaica fare in the report, you ask? Well, we are obsessed with “rankings,” but this time it’s a little more complex than usual, because the methodology has changed. So, according to the World Bank, 2017 rankings cannot be directly compared with those for 2016. Although Jamaica ranked 65 in 2016 and now stands at 67 in 2017, in real terms this is a not a “slip” in the rankings, but rather holding firm. You have to compare like with like by looking at the table with back calculations.
So – the ease of doing business ranking is now based on the distance to frontier score. This measure shows how close each economy is to global best practices in business regulation. A higher score indicates a more efficient business environment and stronger legal institutions. On the distance to frontier metric, Jamaica’s score went up from 66.73 in Doing Business 2016 to 67.54 in Doing Business 2017, using a comparable methodology. This means that in the last year Jamaica has improved its business regulations as captured by the Doing Business indicators in absolute terms—the country is narrowing the gap with the global regulatory frontier.
There are other “pluses”:
- Jamaica implemented substantive improvements in the local regulatory framework in the following areas in 2015/16:
- Jamaica made paying taxes less costly by increasing tax depreciation rates and the initial capital allowance for assets acquired on or after January 1, 2014. Furthermore, companies incorporated for less than 24 months are exempted from paying the minimum business tax. Jamaica also made paying taxes easier by implementing an electronic system for filing of corporate income tax, VAT and social security contributions.
- Jamaica reduced the time of documentary compliance for exporting by implementing ASYCUDA World, an automated customs data management system.
Here is today’s press release from the World Bank Group on the Latin America and Caribbean region, in which Jamaica’s progress is noted. Thanks very much to Gerry McDaniel (World Bank in Jamaica) for adding the above clarifications.
Latin America and the Caribbean Continues to Improve its Business Environment, Says Latest Doing Business Report
WASHINGTON, October 25, 2016 – Business reform activity accelerated in Latin America and the Caribbean with over two-thirds of the region’s 32 economies1 taking steps to improve the business climate for entrepreneurs, says the World Bank Group’s Doing Business 2017: Equal Opportunity for All.
The report records a total of 32 reforms implemented by the region’s economies in the past year, compared with 24 the previous year.
Furthermore, Doing Business data shows efforts by governments to make it easier to do business in the region. For example, starting a business now takes an average of 32 days in Latin America and the Caribbean, compared with 55 days five years ago. However, there is a substantial variation across the region. For instance, in the area of Getting Electricity, entrepreneurs faced 97 power outages in 2015 in Guyana, compared with zero outages in Costa Rica.
“In the past year, business reforms in the region focused on the areas of Starting a Business, Paying Taxes and Trading Across Borders,” said Augusto Lopez-Claros, Director, Global Indicators Group, Development Economics, World Bank Group. “It is essential for economies in the region to further remove obstacles to growth in these areas in order to improve their business environment.”
On average, economies in Latin America and the Caribbean perform best in the areas of Getting Electricity and Getting Credit. The average time it takes a warehouse to get connected to the grid in the region is 66 days, about a month shorter than the global average of 93 days.
Yet, complying with tax regulations remains cumbersome in the region. The time required to pay taxes is 343 hours (43 working days) per year on average, compared to the global average of 251 hours (31 working days). However, nine economies took steps in the past year to improve the process of complying with tax requirements, while Guatemala made paying taxes less costly for a medium sized company by reducing the rate of corporate income tax.
Nine economies in the region implemented more than one reform making it easier to do business: Argentina, The Bahamas, Bolivia, Brazil, Dominican Republic, Ecuador, Guyana, Jamaica, and Puerto Rico (United States). Jamaica adopted an automated customs data management system which reduced the time for traders’ documentary compliance. Ecuador made starting a business easier by eliminating the need to publish company charters in local newspapers. Puerto Rico (U.S.) made registering property easier by digitizing its land records and improving the quality of infrastructure and transparency of its land administration system.
For the first time, the report includes a gender dimension in three indicators: Starting a Business, Registering Property and Enforcing Contracts. The report finds that a few economies in the region, such as Haiti, and Suriname, place additional legal barriers in front of women entrepreneurs. For instance, in Suriname, married women need to provide their husband’s identification documents in order to start a business.
The Paying Taxes indicator has been expanded to cover post-filing processes, such as tax audits and VAT refund. Economies in the region generally underperform in these additional areas. For example tax audit compliance time is lengthy in Nicaragua and the Dominican Republic.
1 Chile, which is classified as an OECD high-income economy, is not included in the reform count and regional averages.
Contact: In Washington: Indira Chand +1 (202) 458-0434, +1 (703) 376-7491, email@example.com
P.S. You might also be interested to know that this news comes out as the FOROMIC International Conference takes place in Montego Bay (October 24 – 26, 2016) – for the first time in Jamaica. The Inter-American Microenterprise Forum (FOROMIC) funded by the Inter-American Development Bank is a space where business and financial institutions, with a focus on microfinance for small and medium sized businesses, are able to showcase innovative efforts towards financial inclusion. For live streaming and more, go to http://www.fomin-events.com/foromic/2016/web/ Big tings a gwaan!