House Passes Income Tax (Amendment) Act

first_imgHouse Passes Income Tax (Amendment) Act Finance & Public ServiceJuly 31, 2013Written by: Alphea Saunders RelatedWork Far Advanced to Establish Venture Capital Programme The House of Representatives, on July 30, passed the Income Tax (Amendment) Act, 2013, to regularise measures already in place, and make permanent, the revenue measures that were introduced as at April 1.“It does not represent new or additional measures,” said Minister of Finance and Planning, Dr. the Hon. Peter Phillips.The changes, which were implemented by way of a provisional order, address several strategies that were effected to raise revenues. These include the widening of the definition of emoluments accruing to persons or family members, by reason of office or employment, to include, cash benefit or kind, including rent or laundry allowance received by such persons.The Bill also provides for changes to circumstances by which tax is applied to the value of accommodations, and amendments to the withholding tax on dividends, which was raised to 15 per cent, effective April 1, 2013.“Amendments are also made to section 38 of the Income Tax Act making dividend income tax to be withheld at source and paid over to the collector of taxes…the tax is not to be withheld for distribution payments to a resident company with more than 25 per cent voting rights in the distributing company,” he elaborated.Additionally, there was an increase in the income tax threshold for individuals, from $441,168  to $507,312, which the Minister said has resulted in some 3,000 additional persons being relieved, and others benefitting from a lower, effective rate of taxation on their overall compensation packages.Minister Phillips also pointed to the reduction in Corporate Income tax, where companies regulated by the Financial Services Commission (FSC), the Bank of Jamaica, Office of Utilities Regulation, and Ministry of Finance, continue to pay a rate of 33.3 per cent, but other companies are required to pay a rate of 25 per cent, as of January 1, 2013. The Act has been amended to reflect these changes.“It is also the case that effective April 1, 2013, further amendments were made to the Income Tax Act to impose a surtax on the taxable income of large, unregulated companies, which incur an additional income tax of five per cent, to make their rate 30 per cent,” he stated.The Finance Minister pointed out that these were part of a set of measures, that were necessary in order to attain the 7.5 per cent primary surplus, which was a condition of the Extended Fund Facility agreement with the International Monetary Fund (IMF).Meanwhile, he said the section of the bill, which relates to the Revenue Administration Act, is being corrected to allow for the inclusion of tax information exchange agreements in the definition of “international tax treaties”.The Provisional Collection of Tax (Stamp Duty) Order, 2013, and the Provisional Collection of Tax (Transfer Tax), were passed along with the Income Tax Amendment Act. Story HighlightsThe changes address several strategies that were effected to raise revenuesThe Bill also provides for changes to the application of tax to the value of accommodationsThere was an increase in the income tax threshold for individuals RelatedMegaMart Thanks Public Sector Workers with $1.5 Billion Reward Programmecenter_img RelatedFDI Jumps 66 Per Cent FacebookTwitterWhatsAppEmail Advertisementslast_img read more