Auditing firm KPMG unsure about new taxes
Auditing firm, KPMG, is expressing reservation about the two new tax measures the Government has introduced to replace the controversial bank tax it was forced to withdraw.
The Government is now seeking to bring in $2.3 billion in revenues from a withholding tax on all insurance premiums paid to non-residents by Jamaican residents and General Consumption tax on imported services.
But as Debbie-Ann Wright reports, KPMG believes the new taxes might not work as smoothly as the Government expects.
In a post budget tax bulletin KPMG says it is unsure about whether any significant revenue will come from the withholding tax on insurance premiums.
It notes that this is because Jamaica has double taxation treaties with countries such as the United States, United Kingdom, Germany and Switzerland and with CARICOM countries.
And KPMG says these treaties may override the proposed withholding tax on insurance premiums paid to residents of those countries.
KPMG also says there might be a shift to various forms of re-insurance by those that are not covered by the tax treaties and are subject to the new withholding tax.
And the firm also says it is not clear how much additional revenue may be raised by this measure and the finance minister did not give a figure.
Meanwhile, KPMG says the GCT on imported services marks a significant change in GCT policy and increases the cost to Jamaican businesses that use imported services.
It says it expects the measure to create much debate because it proposes to change the core principle of the General Consumption Tax from a value added tax to a sales tax and because it tries to change behaviour from consuming imported services to domestic services.
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