Daraine Luton, Senior Staff Reporter
THE PROMISE of tax relief has resulted in some international companies establishing their group headquarters in Jamaica, the Government has revealed.
Dr Peter Phillips, the minister of finance and planning, said yesterday that the bill, which has been tabled in Parliament to grant income-tax reprieve to employees of international businesses that establish group headquarters in Jamaica, was done to honour a commitment given by the previous government.
"There were commitments given against which some companies acted to establish group headquarters in Jamaica," Phillips said during the weekly Jamaica House Press briefing.
On Tuesday, the Government tabled legislation in Parliament which seeks to exempt persons who are not residents of Jamaica and who perform prescribed operations in the country from the payment of income tax.
"It is hoped that by facilitating the establishment of group head office companies in Jamaica, other companies will realise the economic benefits, including increased foreign investments, access of alternative capital providers, new markets and the creation of new jobs," read the memorandum of objects and reasons.
Under the proposed law, companies must apply to the minister of finance for a certificate which designates it as a group head office.
The minister is obliged to refuse the grant of certificate if the applicant was incorporated or registered under any enactment in the country.
The minister cannot issue the certificate unless the entity proposes to employ, or already employs at least 30 per cent of its employees from among citizens of Jamaica who are resident in Jamaica.
"The bill exempts persons who are not residents of Jamaica and who perform group head office activities from the payment of income tax," the memorandum stated.
DIGICEL WELCOMES PROPOSAL
Contacted yesterday, telecommunications company Digicel, which is now building its group headquarters in downtown Kingston, did not to say whether it received commitments from the Government for the establishment of its group headquarters in Jamaica, and whether those commitments have been fulfilled.
The company, however, said: "We welcome any initiative that encourages further foreign-direct investment into Jamaica."
Digicel added: "We expect that Digicel will be entitled to avail of the measures contained therein, as will any other company that meets the criteria set out in the legislation that has been tabled."
Yesterday, Phillips said the Government was "committed to the idea that the word of the Government of Jamaica ought to be a secure word".
He also said it was a worthwhile objective to try to encourage international business to come to Jamaica and operate. The minister said it would generate economic activity which can spur economic growth.
"It is a win-win situation. It does provide a certain incentive and what it does is bring business, which is not here now, to come, potentially," Phillips said.
The minister was unable to state the extent to which the country's revenue of GDP would be enhanced if Parliament approves the amendment to the Income Tax Act.