Govt promises income tax bill regulation soon
MINISTER of Justice, Senator Mark Golding, has said that the regulations covering amendments to the Income Tax Act, to encourage foreign businesses to establish group head offices in Jamaica, should be in place by the end of October.
However, in response to questions from Opposition Senators on Friday, the minister was not in a position to explain why these amendments were not linked to the tax reform measures currently before the Cabinet, although he denied that the tax measures were being introduced on a "piecemeal" basis.
"There is a White Paper before the Cabinet resulting from the recent tax reform deliberations, and I expect Cabinet to deal with it in short order," Golding told the Senators.
He insisted that the passage of the amendments was a signal to foreign investors seeking a place to investment, and showed consistency on the part of succeeding administrations.
Senator Golding was responding to a number of concerns raised by Opposition members, some of which have also been raised in the media, about the Government's decision to pass the amendments which include exempting non-resident employees from paying income tax.
Opposition Senator Malahoo Forte raised the issue of the government "continuing to legislate and reform in a piecemeal way".
"A piecemeal approach does not facilitate a look at the global landscape ... and we need to see if this piecemeal approach is not disabling us, instead of enabling us," Senator Malahoo Forte said.
She also questioned whether there should not be a distinction between incentives provided for companies that are incorporated in Jamaica, as against those which merely apply for designation of an office as a group head office.
However, Senator Golding said that there was no issue of juxtaposing incorporation versus incorporation, as the focus of the legislation was not to encourage incorporation.
"What the Bill allows for is that the company that is already incorporated and wishes to establish its head office here, do so through registering here under Part Four of the Companies Act," he said, adding that it was an important piece of flexibility which enhances the chances of the legislation achieving its objectives.
The Bill amends the Income Tax Act to allow foreign companies to apply for a certificate designating it as an approved group head office performing certain specified functions in Jamaica. The certification allows access to incentives including exempting employees of the company who are non-residents of Jamaica but perform group head office activities here paying income tax.
It has been passed in the Senate, as well as by the House of Representatives on September 25 without amendment, with support from both Government and Opposition.