Amendment passed to GCT Act, small businesses get relief
Nadine Wilson-Harris, Staff Reporter
Members of the Senate on Friday supported an amendment to the General Consumption Tax (GCT) Act in order to facilitate the voluntary registration of small business persons who fall below the new GCT threshold of $10 million, but who opt to remain registered taxpayers.
The GCT threshold moved from $3 million to $10 million as part of revenue measures introduced during the 2019/2020 fiscal year.
“The measure has meant that small businesses can spend less time on administration and focus more energies on growing their companies. The measure has also of course been working together with the government’s removal of the minimum business tax to ease the burden on small businesses and to give them more space to grow,” said Leader of Government Business Senator Kamina Johnson Smith in piloting the bill.
She said it is anticipated that the increase in the GCT threshold would result in the deregistration of persons whose gross total supplies are less than $10 million.
“These persons would therefore no longer be required to file a monthly GCT return as they wouldn’t be considered registered taxpayers based on the GCT threshold status,” she said.
Consideration was given to the fact that individuals who fall below the new threshold might opt to be registered as taxpayers so that they could benefit from claiming a tax credit or a refund of GCT paid on goods or services purchased for their businesses.
“The government policy of increasing the threshold has the positive effect of aiding and stimulating the micro and small business sectors of the economy, and in that regard, cost savings should occur to the sector as companies operating at the lower end of the revenue threshold will not be obliged to undertake all that is entailed with registration and filing of GCT returns,” Johnson Smith noted.
In addition to amending sections of the GCT Act, it was proposed that consequential changes be made to sections of the Income Tax Act as well.
The changes would mean that those who meet the annual $10 million threshold would be mandated to apply to the Commissioner General to be registered as taxpayers.
This must be done within 21 days after the attainment of the threshold and the Commissioner General may use his or discretion in extending the time as given under the subsection if satisfied that the circumstances allow for it.
The bill was endorsed by senators on both sides unopposed.
“We have always supported anything that seeks to enhance our economy as we seek growth and development,” said opposition senator Wensworth Skeffery.
“It is obvious that the micro, small and medium enterprises will no doubt benefit from this proposal and anything to empower businesses, and by extension, to empower the people, rest assured that we on this side will always do what is right and is in the best interest of the Jamaican people,” he said.
He, however, called for more to be done to ensure that the payment of taxes can be done with more ease.
“If you go to our tax offices, sometimes you have to wonder what is happening there in terms of the congestion that takes place, the waiting time,” he lamented.
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