Finance Ministry: No Government incentives for Chinese merchants

BY JEDIAEL CARTER Staff reporter carterj@jamaicaobserver.com

Saturday, February 04, 2017

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The Ministry of Finance has asserted that there is no tax incentive offered to Asian merchants across the island, thus putting paid to a previously held popular belief.


Last year in the ‘Asian Invasion’ series published in the Jamaica Observer, multiple local entrepreneurs alleged that Chinese merchants were granted incentives that created unfair market conditions. They alleged that the Chinese wholesale operators were given five years to operate their businesses without paying taxes.


"The Government has no policy initiative at this time that incentivises businesses of Asian origin," an e-mailed response from the ministry’s Public Relations Officer Kadisha Sharp stated.


It continued: "Since 2014, the GoJ (Government of Jamaica)has encouraged and continued to provide for non-sector-specific productive incentives through the Fiscal Incentives Regime, as provided by the Fiscal Incentive (Miscellaneous Provisions) Act. In addition to this general incentive framework which is applied in a non-discriminatory manner provided the qualifications are met by the entity, the GoJ retained select individual incentives due to the peculiarities of such incentives. These include — Bauxite and Alumina Industries (Encouragement) Act, the Special Economic Zone Act 2016, and the Income Tax (Amendment) 2012 (which supports group headquarters), urban renewal, provide a broad scheme of incentives that are accessible to foreign investors."


In light of this, the ministry stated that the country has seen an improvement in foreign direct investments and in the Doing Business index, as well as an increase in tax revenues and employment opportunities.


The ministry also stressed that foreign investors are not taxed differently than locals.


"Jamaica does not practice differentials in taxing regime — ie foreigner vs local businesses. Taxes are applied in keeping with the respective legislation. These businesses are treated in similar manner."


However, the ministry pointed out that "if there are double taxation agreements, a foreign investor may take full advantage of its provision."


A double taxation agreement is signed between countries to reduce taxation on international workers and companies, so they avoid being taxed twice.


According to the website of the Tax Administration of Jamaica, Jamaica has signed to bilateral treaties with 11 countries, namely Canada, Denmark, Germany, Israel, Norway, Sweden, United Kingdom, United States, People’s Republic of China, France, Spain as well as countries within the Caribbean Community.


The ministry reiterated that the Corporate Income Tax rate remains at 25 per cent for unregulated companies, in addition with their statutory obligations under the NIS, NHT and HEART Acts.


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