Mon | Nov 30, 2020

GK Remittance tussles with TAJ over GCT input tax

Published:Friday | May 31, 2019 | 12:24 AM

The tax authorities have handed GraceKennedy Remittance Services Limited, GKRS, a near-$360-million bill for miscalculated consumption taxes four years ago, but the company is fighting the assessment and has made no provision for it.

Tax Administration Jamaica (TAJ) advised the remittance company on March 20 that it made incorrect claims for input taxes in its General Consumption Tax (GCT) filings for 2015, a determination that GKRS disputes.

Input tax is charged against purchases by a registered taxpayer for use in its own business. A percentage of this cost can be claimed back as a credit, which is netted against the taxpayer’s GCT liabilities.

TAJ has determined that GKRS, which is a subsidiary of listed conglomerate GraceKennedy Limited, now owes the State $358.87 million, inclusive of interest and penalties.

The company has lodged an objection against the assessment “on the basis that TAJ incorrectly disallowed the GCT input taxes,” its parent company said in its earnings report for the March 2019 quarter.

“The group is of the opinion that GKRS has a strong basis for objection in respect of these assessments and that GKRS will be successful in having these assessments withdrawn. Accordingly, no amounts have been provided for in these financial statements in respect of these matters,” GraceKennedy said.

Group CEO Don Wehby said he would add no comment beyond what was in the financial report.

TAJ head of communications Meris Haughton said the tax agency does not discuss issues relating to individual taxpayers, unless it is a matter in court.

avia.collinder@gleanerjm.com