Apr 2014 Financial News

Minimum business tax, GCT amendments coming in new Budget

Apr 02, 2014

The minimum business tax initially announced two years ago will be implemented this fiscal year.

The measure has been included in the revenue of estimates for the 2014/15 Budget under a new revenue line, according to Jamaica's updated International Monetary Fund Letter of Intent.

Finance and Planning Minister Dr Peter Phillips introduced the minimum business tax as part of several measures outlined in a $23.4-billion tax package to help close funding gaps in the $612-billion Budget for fiscal year 2012/13.

Phillips had proposed a flat-rate minimum tax of $60,000 applicable to professionals and companies, excluding start-ups in year one of operation, charities, and companies exempt under Section 12 of the Income Tax Act.

The Government also said that as a structural benchmark, amendments to the General Consumption Tax (GCT) Act are expected to be tabled by June 2014.

BROADENED TAX BASE

The main objectives of the reform of the GCT are to broaden the tax base and improve its administration.

The zero-rating for government purchases will be eliminated, effective this fiscal year.

The revisions also include broadening the application of GCT and Special Consumption Tax (SCT) to motor vehicles, including amending the GCT Act to allow for payment of GCT on vehicles over 10 years, initially by way of a provisional order.

In addition, the Government will be curtailing the availability of a reduced rate of SCT on selected motor-vehicle imports by limiting the cost, insurance and freight value to US$35,000 afforded to pickup trucks used for agricultural activity.

According to the IMF document, the Government will also eliminate the exempt status of electricity for indepen-dent private-power producers, and start-up companies will be allowed, as of July 1, 2014, to claim GCT refunds for excess credit immediately.

Phillips is expected to table the Estimates of Expenditure for 2014/15 in Parliament on Thursday, April 3.


Source:
McPherse Thompson, Assistant Business Editor
mcpherse.thompson@gleanerjm.com
Jamaica Gleaner
Wednesday April 2, 2014

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