Government to pay GCT on purchases
KINGSTON, Jamaica – Effective June 1, all government ministries, departments and agencies (MDAs) are required to pay GCT on the purchase of goods and services.
Tax Administration Jamaica (TAJ) stated in an advisory Tuesday that the government entities will no longer be able to have their invoices or purchase orders zero-rated at a tax office.
With the new requirements, suppliers are “required to charge GCT at the applicable rates to MDAs on goods and services which are subject to GCT,” the TAJ said.
Meanwhile, MDAs and designated public bodies will not pay the GCT directly to suppliers but must instead withhold the amount and issue a withholding tax certificate (WTC) to the supplier. As such, these agencies have been registered as Tax Withholding Entities (TWE) to accommodate the new requirements.
“In the case of entities now registered as a TWE and which also operate as a GCT registered taxpayer, they will be able to claim the amounts paid for GCT as a tax credit against GCT collected from sales,” the TAJ said.