PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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Asset Mobilization 45
A package of financial and tax measures is proposed for adoption, some already in the
works or nearing completion. It is aimed at addressing a key issue highlighted by the
analysis presented in this report: freeing up idle assets, increasing their market mobility
and, hence, enabling their efficient use in production.
1. Loan Portability
It is being proposed that stamp duty on loans be abolished. It has been proven to hinder
the portability of bank loans. In so doing, they facilitates the sub-optimal functioning of
the capital market and stymies the allocative efficiency of said market by attaching
punitive costs to the transfer of loans from one financial institution to another.
Similarly, there is need for the removal of both the stamp duty and transfer tax on
corporate bonds and commercial paper, making portability less costly to the borrower and
the investor. 46
Current Status: The issue of the potential loss of revenue is moot since, with the current
structure, loans are not being transferred. Therefore, there is no threat to current revenue
flows. This proposal is currently being implemented.
2. Secured Transactions
A secured-transactions framework allows borrowers to pledge movable property as
security for a loan in a manner that removes ambiguity regarding the property that has
been pledged, to whom the property has been pledged, and gives the lender the right to
repossess these assets speedily in the event of payment default. Under this transformative
paradigm, which will preclude the usage of traditional instruments such as Bills of Sale,
security interests will be noted on a public electronic registry. This will substantially
reduce the transactions cost of registering collateral interests, thereby enabling greater
access to sources of finance.
45 In consultation with the Jamaica Competitiveness Enhancement Programme.
46 Detailed analysis of this issue is presented in Chapter IV.B.
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