Decrease in GCT effective April 1, 2020
Please be advise that effective Wednesday, April 1, 2020 the Standard Rate of General Consumption Tax (GCT) payable in the respect to taxable goods and services will be 15%.
Increase in National Insurance Contributions
As part of the recent budget presentation from the Ministry of Finance. There is an increase in the NIS contributions for both employee and employers effective April 1, 2022.
The current rate of 5.5 percent will now be increased to 6%. This increase also increases the Maximum contribution for 2022 to $270,000.
The link below provides a full breakdown of the Contribution ceiling:
Garnishment Policy now in effect at TAJ
In its continued efforts to identify and bring tax evaders and avoiders to book, TAJ has now employed another strategy to bolster its enforcement and compliance activities with the introduction of Garnishment.
Garnishment refers to a process where a “Notice is served on a person for the purpose of legally seizing money belonging to a debtor”. Garnishment has always existed under the laws of Jamaica. However, the concept has now been incorporated into the Tax Collection Act (the TCA). Where taxes are owed, Section 40B of the TCA allows the Commissioner General, TAJ, to issue a Notice of Garnishment and have it served on a third party. Garnishment, will only be done when the Commissioner General is unable or unlikely to be able to collect from the tax debtor himself.
Garnishment may be pursued where the taxpayer owes taxes and the Commissioner General is unable to collect from the tax debtor and is unable to make a satisfactory arrangement for the payment. The Commissioner General must determine or have reasonable cause to believe that a third party holds, controls or has custody of money belonging to the tax debtor or the third party is liable to make a payment to the tax debtor or the third party will, within one year, be liable to make a payment to the tax debtor.
Outstanding money is recovered using a Garnishment Notice which informs a third party that he/she is required to pay over to the Commissioner General, monies belonging or due to the tax debtor, for the satisfaction of the tax debtor’s debt. A Garnishment Notice does not require a court order to be effective.
The Garnishee, that is, the person to whom a Notice is issued, may be any third party who is the holder, controller or custodian of monies belonging to a tax debtor. This includes:
- Lawyers
- Banks and financial institutions
- Lessees and tenants
- Third parties involved in trading or contractual relations with the taxpayer
- Employers
To date, TAJ has served four (4) Garnishment Notices which have yielded positive results in terms of formalizing arrangements for the monthly collection of outstanding sums. It is expected that this mechanism will be used more rigorously in the future.
The Environmental Protection Levy (EPL)
The Environmental Protection Levy (EPL) which took effect on June 1, 2015, required domestic manufacturers to remit returns not later than July 31, 2015. Arising out of a series of consultations with key stakeholders, GOJ has revised the filing of returns by manufacturersby the last working day October, 2015. Consistent with the new Act, domestic manufacturers are being advised to pay careful attention to the conditionalities of the Income Tax Act:
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Pursuant to Part III of the First Schedule of the Income Tax Act:
- Persons who are engaged in the transformation of raw materials or intermediate goods into a new or distinct good are manufacturers and must charge the EPL (the EPL must be charged whether or not you are currently registered with Ministry of Industry, Investment and Commerce (MIIC). ·
- All manufacturers are permitted to account for the EPL imposed effective June 1, 2015 on their September quarterly return due on the last working day of October 2015. ·
- Manufacturers who incurred EPL at the ports on productive inputs, which have been used, or are to be used in the manufacturing process, will have the EPL paid, available as a credit when accounting for the tax on their return in October 2015.
- Manufacturers who purchased goods from local manufacturers for use in their production process and paid the EPL are eligible for a credit when accounting for the tax.
Withholding Tax on Specified Services
The Ministry of Finance and Planning is advising that the Withholding Tax on Specified Services which took effect June 1, 2015 will be implemented on September 1, 2015. The Withholding Tax on Specified Services targets persons liable to income tax but are noncompliant
and/or may not be in the tax data base.