Saturday, September 27, 2014 | 6:56 AM
KINGSTON, Jamaica – The General Consumption Tax (Amendment) Act was passed in the Senate on Friday, September 26.
The legislation introduces a series of adjustments, which are at facilitating smoother operations of businesses as well as achieving greater efficiency and effectiveness in the system of tax collection, and also widen the tax net.
Opening the debate on the Bill, Minister of Justice, Mark Golding, said it seeks to facilitate Jamaican businesses by leveling the playing field and making them more internationally competitive.
He noted that several of the new measures are of particular benefit to the manufacturing sector.
Citing the deferment regime, he said it allows manufacturers to delay payment of tax on the importation of raw materials, consumables, and intermediate goods or spare parts, until the manufacturer is making his next GCT return.
“Presently, the deferment system applies only to manufacturers of taxable supplies, which are those suppliers of goods that attract GCT, and only inputs acquired for use in the manufacture of taxable goods may be deferred in this way. The scope of this regime is now being extended to benefit manufacturers, who are engaged in mixed activities (which includes) the production of goods, which are taxable and also exempt goods on which GCT does not apply,” he stated.
Golding explained that the amendments will also allow small business operators, whose sales fall below the GCT threshold, to qualify for registration under the Act, and therefore receive benefits.
“There is a threshold of annual turnover of a business. If you fall below that threshold of $3 million, you cannot register as a GCT taxpayer. This is being changed to allow traders, who may be below that threshold, to register if they so wish. This will assist the micro, small and medium enterprises (MSME) sector… as businesses…will no longer have to absorb the cost of the GCT on their business expenses,” Golding said.
The amendments also introduce improved measures for dealing with tax avoidance schemes, while also widening the range of offences under the Act. Penalties for braches of the Act have also been increased.
Opposition Senator, Nigel Clarke welcomed the amendments to the legislation.
He noted that the legislation enhances the efficiency and effectiveness of the regime of tax collection as it relates to the GCT Act.
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Senate passes General Consumption Tax (GCT - amendment) Act
