The persevering with delay in bringing closure to proposed modifications to tax legal guidelines and insurance policies stays a supply of irritation to the group that represents chartered accountants in Jamaica.
Consequently, Allison Peart, president of the Institute of Chartered Accountants of Jamaica, ICAJ, is urging members not be caught up in authorities bulletins of intentions, however to maintain centered on the precise provisions of legal guidelines and on their implementation by tax authorities.
Peart has additionally up to date ICAJ members on dialogue by which the affiliation has opposed a proposal which, she stated, emanated from the Nationwide Housing Belief, NHT, for the imposition of NHT contribution liabilities on dividends.
“Don’t just look at what the government says in the budget, monitor what is happening throughout the year,” Peart advised ICAJ members throughout a taxation webinar on Wednesday.
Among the many excellent reform issues, Peart listed makes an attempt to repeal and substitute the Customs Act, which, she reminded, is a regulation courting again to 1941.
“Jamaica is actually known for having a really bad Customs Act. When I used to be a Canadian tax expert, it was kind of embarrassing, for the Jamaican Customs Act was always referred to as what you did not want to have. It was one of the worst in the world. So, thank you that it is being addressed,” stated Peart.
“However, I have heard about this for so long. I have even met with the people who are making the changes, and it still hasn’t occurred. So, let’s pray that we get the Customs Act and that it is user-friendly. You shouldn’t need a PhD in taxation to understand it.”
She additionally urged accountants to observe the reform processes involving the Earnings Tax Act and the Basic Consumption Tax Act, which, she identified, is modelled off comparable Canadian laws.
“Our Income Tax Act is ad hoc, and that is putting it mildly. I am not sure if our GCT is a consumption tax , a VAT (value added tax), or a hybrid of the two. I am a little confused. We make changes to it because of various interest groups, and it loses sight of the tax policy,” the ICAJ president steered.
The chartered accountants are additionally cautious of the Giant-Scale Tasks and Pioneers Act of 2014, which the ICAJ head famous was launched to exchange tax holidays with tax credit and was initially introduced for modification final yr.
“They (the amendments) are still not here yet,” Peart declared, noting the latest announcement that authorities intends to hold out this explicit reform within the present fiscal yr.
Peart stated the change can be well timed, given what she described as rising enterprise confidence and plans for big investments.
“We are going to watch to see how it works,” she cautioned, declaring that whereas the finance minister had the prerogative to regulate incentives for big tasks and pioneer industries, the exact definition of such tasks and industries had been but to be seen.
Chartered accountants have additionally been urged to pay eager consideration to proposals for the amalgamation of payroll deductions. On this context, the ICAJ president raised what she stated had been plans by the NHT to vary the tax therapy of passive earnings, comparable to dividends on fairness investments.
“The NHT said they were going to relook at it and they didn’t apply it for last year, which is when we file as at March this year. Some of our legislations have hanging definitions. The NHT Act has this hanging definition of earnings,” the ICAJ head opined.
She defined that the affiliation’s objection to the NHT proposal was on the idea of the coverage of the Belief chatting with NHT contributions being utilized to gainful employment.
“The last time I checked, you could not be gainfully employed receiving dividends and (the NHT Act) also sets out what is subject to NHT. Dividends are not subject to NHT,” Peart asserted.
“However, the NHT has decided that earnings spoke to statutory income and therefore, everything that was statutory income was subject to NHT – an absolutely incorrect definition,” she stated.
The housing company’s interpretation, she added, would open the chance for the imposition of NHT payroll taxes on non-residents.
“We need to be careful that the application of these laws makes sense, and that we ensure that we are not paying employment taxes on things that shouldn’t [attract them],” Peart stated.