An extensive tax break, duty-free imports and no General Consumption Tax on tolls charged to users are among the raft of concessions to China Harbour Engineering company under the agreement for the construction of the North-South Highway.
That’s according to documents submitted by the National Road Operating and Constructing Company to parliamentarians ahead of its appearance before the Public Administration and Appropriations Committee, PAAC, last week.
This is in addition to the 12-hundred acres of land, including prime real estate in Mammee Bay in St. Ann and Caymanas in St. Catherine.
Based on the agreement, CHEC will not pay corporate income tax until 20 years after the final handover of the highway.
It also allows for tax and accounting losses to be carried forward until they’ve been fully absorbed.
CHEC is also not paying stamp duties for the duration of the concession period.
It’s exempt from stamp duties on equity as well as duty on capital increase and shares transfer.
It will not pay stamp duty on insurance policies, financial instruments, assignment, leasing activities, other securities and other forms of transfer of contract.
China Harbour has also been exempt from withholding tax on interest payments and other payments made for loans with foreign or multilateral institutions or foreign commercial banks under the Financing Agreements.
It’s also exempt from customs duty, duty-free importation or equipment and machinery, contractor’s levy, property tax, the transfer tax on the transfer of shares.
The General Consumption tax on tolls charged to users is zero rates until 35 years after the final handover.
NROCC’s Managing Director, Ivan Anderson, last week said it would take at least another 20 years before the North-South Highway would make a profit.
He said CHEC is currently spending approximately $30-million in debt servicing per annum on the highway.
It’s, however, generating revenues of only $18-million per year.