Jamaicans Oppose Withdrawl Tax

May 1, 2014 Taxation in Jamaica

Withdrawl tax in JamaicaKINGSTON – Strong opposition has arisen in Jamaica to a newly proposed tax on withdrawals from ATMs and banks.

Over the last week several professional groups and politicians in Jamaica have come forward to voice their stern opposition to a new government proposal to tax all withdrawals from financial institutions, including cash withdrawals from ATMs, with some groups even going so far as to call on the government to drop the proposal entirely.

The government is currently proposing that all financial transactions and encashments of up to JMD 1 million should be subject to a 0.1 percent tax to be paid by the financial institution, a measure which could raise as much as much as JMD 2.25 billion per year.

In response to the proposal, which was first raised on March 24th, the spokesperson for the opposition Audley Shaw indicated that he is calling for the government to drop the tax entirely by April 30th.

The Jamaica Securities Dealers Association has also spoken out against the proposed tax, claiming that the measure could result in significant levels of capital flight, as investors will seek out more stable destinations for their funds.

In response the concerns of the opposition and financial institutions in Jamaica, the Finance Minister Peter Phillips has indicated that the government is considering revising the proposed tax to make it less punitive on regular citizens withdrawing money from their bank accounts, and finding new means to raise the same amount of tax revenues, but he gave no indication to when the review may take place.

Photo by: Matt Runkle