By NATARIO McKENZIE
Tribune Business Reporter
The Government's proposed Over-the-Hill revitalisation could have the "unintended consequence" of regularising many firms operating in the informal economy, a top official said yesterday.
Dr Nicola Virgill-Rolle, head of the government's economic planning unit, told Tribune Business that the Minnis administration planned to introduce an electronic card, or 'E-card system', to ensure the right companies access 'tax breaks' and thus prevent fraud and tax evasion.
"We are going to assist businesses with regulation, so business facilitation is something we will do, and we really encourage people to be regularised," Dr Virgill-Rolle said. "Once you are a business in the area and you meet the qualifications of under $5 million [turnover] and the other stipulations also, about being engaged in the sale of alcohol or gaming, we are able to work with you to help you through the process."
She added: "I think that may be an unintended consequence, but we will - as much as possible - facilitate that because it's very good data in terms of what the GDP is coming out of this area. If it is an unintended consequence, it's one I'm sure will be very helpful.
"There are benefits of regularisation. It's really important to get regularised. We will be having a series of education programmes to really encourage formalisation. In many cases it's the law, and in other cases we know it's something you can see benefits from."
As for enforcement, Dr Virgill-Rolle added: "We're working with the minister of finance for an e-card system in order to monitor that. For example, if you're going to get a Customs exemption to do something to your home you're going into the Department of Inland Revenue and there is a certificate that will be issued to say you will get Customs exemptions up to a certain amount; a reasonable amount, to do the project you say you're going to do.
"You then have two years to utilise that exemption, and the e-card system will track you in order to say that you've drawn down on this much if you don't have a blanket exemption, and are using it at this and that store.
"We're trying to use technology. We have a project team at the Ministry of Finance working with us to ensure that this is done with a minimal amount of fraud because there are teeth in this legislation about fraud. We want those people to flourish and have a proper programme designed to prevent fraud in the first place."
Dr Virgill-Rolle also acknowledged concerns over gentrification, something she said would receive the Government's close attention, so that the revitalisation programme and creation of an Economic Empowerment Zone did not end up pushing out existing residents and businesses through an influx of wealthy outsiders seeking to access the tax incentives.
"We are going to pay close attention to that," she promised. "As a new company seeks to benefit, we are going to be able to monitor trends. What we have found in our research on gentrification, in terms of housing, is that the best approach is to ensure that there is always a good available stock of affordable housing.
"One of the actions in the programme is about ensuring that we build, through either government or private sector means, affordable housing for any land that is identified so there is always a good stock there that would give people options. It's important to think through those things and monitor carefully what we see happening."