The employment tax credit initiative takes effect today.
Tax Administration Jamaica (TAJ) says under the initiative unregulated companies and self-employed individuals, engaged in a trade, vocation or profession, will be entitled to claim a non-refundable Employment Tax Credit when computing their net income tax liability.
However, to qualify for the credit, eligible persons will have to file and pay their monthly payroll statutory deductions on time.
The TAJ says the Employment Tax Credit will be restricted to 30 per cent of the tax chargeable on the company's or trader's income.
The amount of tax credit which may be claimed in respect of each year of assessment will be equivalent to the total amount of payroll deductions and contributions for Education Tax, NHT, NIS and HEART, which have both been declared and paid on time for employees during that year.
The TAJ says eligible persons are encouraged to file and pay their monthly payroll deductions on a timely basis in order to benefit when filing their final income tax return.
It says the tax credit may not be claimed against any income tax chargeable on non-trading income, such as interest and dividend income.
Such income will continue to be liable to tax at 25 per cent.
The TAJ says this decision follows months of discussion by a private sector-led Incentives Working Group, in partnership with representatives of the Ministry of Finance and Planning and the TAJ.
While the employment tax credit will benefit some businesses, it will also serve to encourage greater tax compliance and boost employment.
WATCH: Erica's Edge - Reflections and resolutions
Like our new Facebook page:
Follow us on Twitter: