JCC calls for tax changes to spur growth
The Jamaica Chamber of Commerce (JCC) has called for sweeping changes to the country’s tax-collection structure in order to achieve faster economic growth, recommending a simplification and modernisation of the tax system.
Despite achieving macroeconomic stability in recent years, Jamaica’s rate of economic growth has been anaemic, with the Planning Institute of Jamaica (PIOJ) reporting on Tuesday a projected growth rate for the quarter ending December 2019 is 0.1 per cent.
Among its recommendations is the removal of the five per cent surtax on personal income in excess of J$6 million.
“This restores the personal income tax system to its previous (pre-2016) flat rate structure. It seems that the five per cent additional tax was only introduced in 2016 to help fund the increase in the income tax threshold to $1.5 million. Given current strong tax receipts, this should be treated as a temporary measure, as it was under the Golding administration, and be removed in the 2020 Budget,” the JCC said.
The chamber also called for a simplified corporate taxation model. Multiple rates of withholding tax create significant distortions and unduly influence corporate behaviour, the lobby said.
“Abolition of the dividend withholding tax will reduce the incentive to use tax havens or other lower tax rate jurisdictions for holding companies and, therefore, facilitate businesses using Jamaica as the key hub to support their regional expansion, with associated head office employment, as well as further encouraging the development of Jamaica’s stock exchange and capital markets in line with government policy,” it said.