Tax Changes to Boost Jamaica’s Economy
KINGSTON – Jamaica may soon implement several significant changes to the national tax system in the hopes of reversing the country’s four decade trend of slow economic growth.
On October 29th the Minister of Finance and Planning of Jamaica Peter Phillips tabled two new Acts in national Parliament detailing several proposed changes to the country’s tax legislation, as part of the government’s wider efforts to improve the overall efficiency of the national tax system.
According to the Minister, the current tax system in Jamaica does not adequately support the national economy, and is partially to blame for the lack of any significant economic growth over the last forty years.
Peter Phillips explained that the tax incentives currently being offered to businesses lead to the misallocation of the country’s limited resources, and tax changes need to be implemented to provide incentives to the primary inputs to production.
The two Acts contain proposals which will overhaul and modernize the legislation regarding corporate income tax, and the taxation of losses and capital allowances, and will also introduce a new tax credit for hiring employees.
The process for reviewing and granting discretionary tax waivers to individual businesses will also be changed, implementing a more streamlined and predictable application process, which should encourage more large-scale businesses and commercial enterprises to be launched in the country.
The Minister said that cumulatively the tax changes will “…incentivises investment through streamlined and modernized capital allowances that more closely accord with the useful lives of assets, and it incentivises the employment of labour through the instrument of Employment Tax Credits.”
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