The General Consumption Tax (Amendment) Act was passed in the Senate on Friday, September 26.
The legislation introduces a series of adjustments, which aim to facilitate the operation of businesses as well as achieve greater efficiency and effectiveness in the system of tax collection, and also widen the tax net.
Opening the debate on the Bill, Minister of Justice, Senator Mark Golding, said it seeks to facilitate Jamaican businesses by leveling the playing field and making them more internationally competitive.
He noted that several of the new measures are of particular benefit to the manufacturing sector, which remains an important pillar of the economy, and employs thousands of Jamaicans workers.
Citing the deferment regime, for example, he said it allows manufacturers to delay payment of tax on the importation of raw materials, consumables, and intermediate goods or spare parts, until the manufacturer is making his next GCT return.
“Presently, the deferment system applies only to manufacturers of taxable supplies, which are those suppliers of goods that attract GCT, and only inputs acquired for use in the manufacture of taxable goods may be deferred in this way. The scope of this regime is now being extended to benefit manufacturers, who are engaged in mixed activities (which includes) the production of goods, which are taxable and also exempt goods on which GCT does not apply,” he stated.
Senator Golding explained that the amendments will also allow small business operators, whose sales fall below the GCT threshold, to qualify for registration under the Act, and therefore receive benefits under the GCT system.
“There is a threshold of annual turnover of a business. If you fall below that threshold of $3 million, you cannot register as a GCT taxpayer. This is being changed to allow traders, who may be below that threshold, to register if they so wish. This will assist the micro, small and medium enterprises (MSME) sector… as businesses…will no longer have to absorb the cost of the GCT on their business expenses,” Senator Golding said.
The Justice Minister also informed that the Bill contains measures that improve collection and tackle tax evasion, by strengthening the regime for dealing with persons, who collect GCT but fail to register.
The amendments also introduces improved measures for dealing with tax avoidance schemes, while also widening the range of offences under the Act and bring the penalties for breach of those offences to appropriate and realistic levels.
For his part, Opposition Senator, Nigel Clarke welcomed the amendments to the legislation.
He noted that the legislation enhances the efficiency and effectiveness of the regime of tax collection as it relates to the GCT Act.
The General Consumption Tax (Amendment) Act was passed with two amendments. The Bill was passed in the House of Representatives on September 17.
