Removal of GCT on importation of race horses expected to boost industry
DR Nigel Clarke, minister of finance, believes the recent removal of the General Consumption Tax (GCT) on the importation of live horses is a government investment in the local horse racing business that will help revitalise the sport.
Dr Clarke, who was the guest speaker at the recent Thoroughbred Owners and Breeders Association (TOBA) ‘Evening of Excellence’, said that he is aware that the industry is facing significant risks from the dwindling numbers of high-quality breeding stock to contest the races.
“A lot of people don’t know how deep the horse racing industry is in terms of the type of jobs it supports and the diversity of jobs it supports, and people don’t know the potential it has in Jamaica. As we try to maintain the game, I am very, very interested in the sustainable development of the horse racing industry in Jamaica,” Dr Clarke said.
“And we know that there are quite a few challenges and issues, and one of the challenges and issues has been that we, the broodmare stock in the industry, are at a deployable low level. I was informed that way back in 2010, the statistics was that something like 10 per cent of the broodmare stock weren’t able to reproduce.
“By 2021, that number has jumped to 29 per cent but of the horses registered with the Jamaica Racing Commission (JRC), the number is even higher. I believe the number is more like 40 per cent of the broodmare stock, and that’s not good. That is an industry, and if we keep it like that, it is going to run into the ground because we need stock in order for the industry to thrive and flourish,” the finance minister added.
Dr Clarke suggested that the abolition of the GCT will cause the horse racing business to dramatically increase local bloodstock. He also stated that removing GCT reduces the costs of importation by around 28 per cent due to the additional cost added to the purchase of the horse.
“I am not in this business for charity; I am in this business as an investment. And so by taking the GCT off the importation of horses to replenish the broodmare stock, I am doing it with expectation the coffers of government will multiply over time from the activity that I expect this policy to generate.
“I am investing again, but at this time in your industry, by removing the GCT on the importation of horses; I expect to see significant increases in economic activity in the industry over the medium term. We can import the best thoroughbred we can find, but if there isn’t confidence in the integrity of racing, then the industry will not grow in the way we want and expect it to,” said Dr Clarke.
He also disclosed that the Government received $6.3 million in 2022 from the importation of live horses. He stated that the implementation date would be before the end of the first quarter.
“When I look at the numbers, and I looked at the amount that we collected in GCT from the importation of horses, goats, and pigs combined, so when we look at all three, which are suffering in similar ways, and when we look at the GCT for all three in the fiscal year, it shows that the total was $6.3 million. And for $6.3 million, what we were doing was holding back the rejuvenation of an entire industry.
“So we are going through procedures to announce what I announced in my budget presentation about the removal of the GCT on the importation of horses and working towards having this become effective by May 30,” he explained.
Having said that, Dr Clarke stated that horsemen may now put themselves in a position to... get additional horses into the racing sector in order to boost the sport.
“So all those who have their horses identified, I beg you, get them down to Florida and get ready for the ship. Make your arrangements, because at the end of May, I expect that you will be in a position to import the new breed stock that is going to rejuvenate the horse racing in Jamaica.
“So as I said, this is an investment because we are seized of the need to generate domestic economic activity among us here in Jamaica, in addition to creating an environment where racing is at such a high level of integrity and involves such quality horses that others from the Caribbean are encouraged and sensitised to bring their own horses here to race, and this once again becomes an international destination,” said Dr Clarke.