THE Minister of Finance and
Planning announced in the House of Representatives, the proposals for the fiscal
year 2002/2003 on April 18, 2002. However, the details of many of these proposals
have only recently been completed and disseminated by the Ministry. The following
is a synopsis of some proposals and which we wish to bring to your attention.
GOVERNMENT OF JAMAICA (GOJ) TAX-FREE BONDS
The government intends to clamp down on the practice of some local security brokers who purchase GOJ Eurobonds (issued tax-free) and use them to create derivatives which are issued as tax-free instruments. The interest income on these derivatives is subject to tax and the Taxpayer Audit and Assessment Department (TAAD) is currently examining these transactions to ensure that the tax due on these securities is paid.
Where a body corporate makes payment, which are subject to withholding tax, and fails to deduct and pay over the requisite tax to the Inland Revenue Department within 14 days after the month in which the payment was made, section 41 of the Income Tax Act stipulates that the directors of the body corporate will be held jointly and severally liable, with the body corporate, to pay the tax which will be increased by a rate directed by the Commis-sioner of the TAAD. Further the directors may be held guilty of an offence and liable, on summary conviction in a Resident Magistrate's Court, to a fine not exceeding $1 million or three times the amount of tax unpaid, whichever is greater. In default of payment of the fine, the directors may be imprisoned for a term not exceeding 12 months.
GRANTING OF LICENCES/CERTIFICATION
To crack down on professionals and traders who are delinquent in filing their income tax returns, the Minister proposes that a tax compliance certificate be a prerequisite for obtaining various licences and professional certification. You are encouraged to file your returns on a timely basis so as to avoid any interruptions in the operation of your trade or professional practice, where this may apply to you.
USER FEES AT JAMAICA CUSTOMS
Customs brokers, in addition to providing tax compliance certificates to renew their licences, will now face higher licensing fees. The following are the proposed annual licensing fees:
For operating a Private Bonded Warehouse $25,000.00
For operating a Public Bonded Warehouse $50,000.00
For a Body Corporate - $15,000.00
For conditional licences for Companies $10,000.00
For Individuals $10,000.00
Further the computer/data-entry services offered by the Customs Department will be at the following costs
- Flat rate of $500 for entries
with 10 or less entries and $5.00 for each addition keyed in by Customs.
- Processing fees of $500.00
for each diskette received.
WAIVERS AND PRIVILEGES
The Ministry of Finance intends to be very stringent in granting waivers in the future. We suggest therefore that any requests for such waivers be supported by compelling reasons.
Additionally, legislative action, where necessary, will be taken to remove special tax exemptions (esp-ecially withholding tax on interest) given to certain public enterprises.
- Mr. Raphael E. Gordon is the
managing partner of KPMG Peat Marwick, Past President of the Institute of
Chartered Accountants of Jamaica, a member of the Public Accountancy Board,
and Jamaica's representative on the Association of Chartered Certified Accountants
International Assembly.
