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$544 million to be withdrawn from CDF for bauxite budgetary support


The Government is to withdraw just over half a billion dollars from the Capital Development Fund (CDF) to provide budgetary support to the Jamaica Bauxite Institute (JBI) and the bauxite community development programme this fiscal year.

An order, under the Bauxite (Production) Levy Act, giving effect to the withdrawal was tabled in the House of Representatives on Wednesday.

Prior to the sitting of the House, the Economy and Production Committee started discussions on a resolution brought by Manchester Southern Member of Parliament (MP) Michael Stewart, calling on the Government to place a cap on the amount of funds that can be transferred from the CDF to the Government’s central coffers for budgetary support.

Stewart is also calling for the restoration of the levy on bauxite operations, and extensive rehabilitation of bauxite lands.

According to the order, $244.22 million is to be allocated to the JBI, while $300 million will be disbursed for the implementation of special projects in the bauxite communities under the seventh phase of the bauxite community development programme.

MPs in bauxite mining communities across three parishes, at the committee sitting on Wednesday, lamented that communities are being mined out and left without resources, with farmers and their dependents being displaced and relocated to other areas without adequate provisions for them to continue their livelihoods.

The MPs also complained that bauxite mining operations damage infrastructure and that companies should be forced to meet minimum community and infrastructure restoration standards in mining areas.

The CDF was created under the bauxite production and levy law in 1974, with the imposition of a bauxite mining tax. In 2017, the International Monetary Fund (IMF), in a review of its first standby arrangement for Jamaica, said the Government’s decision to abandon the bauxite levy in favour of profit-sharing arrangements was regressive.

The IMF said the move to provide discretionary waivers by further widening leftover exemptions on the bauxite levy had created a revenue loss of more than 0.1 per cent of gross domestic product annually, leaving the sector “undertaxed, and potentially undermining the hardened gains from the elimination of a range of tax incentives in 2014”.

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