Three per cent withholding tax takes effect June 1
Tax Administration Jamaica (TAJ) says come June 1, large companies and government entities will be required to begin withholding three per cent from payments for some services provided by suppliers.
The measure should have been implemented on May 1 but was postponed.
Director of communications at TAJ, Meris Haughton says the process is being done on a phased basis.
The deduction will be done on services that cost more than $50,000.
Haughton notes that the withholding tax mechanism is not new as entities use a similar one to treat with other income taxes.
Meanwhile, the TAJ says persons from whom the tax is withheld are still obligated to file annual and estimated income tax returns and meet their quarterly payments.
The withholding tax on specified services is aimed at capturing persons liable to income tax but who are under reporting or not registered.
It is expected that the measure will assist in the broadening of the tax base, increased reporting and improved revenue collection.