FINANCE Minister Peter Phillips yesterday told the House of Representatives that the Income Tax (Amendment) Act 2012 will provide incentives for multinational corporations operating in multiple jurisdictions to move their activities to Jamaica.
"We are not giving up anything that we now have, rather it is seeking to attract additional economic activities to the country and expand the pool of tax over time, generally, by virtue of these activities," Dr Phillips told the House of Representatives, as he opened the debate on the Bill which was approved yesterday.
The minister sought to assure that the initiative will ensure some level of employment for Jamaicans, as well, and regulate the operations of the companies involved.
He explained that priorto approval entities will be subjected to an approval process, where it will need to meet the criteria for carrying out group headquarters activities, and must ensure that at least 30 per cent of its staff are Jamaicans. He said that regulations are being drafted to address the audit and assessment methodology to be used in ensuring that the entity is operating in keeping with the Income Tax Act, particularly as it relates to the anti-avoidance measures and the arm's length principle.
He added that the Cabinet has also approved the introduction of transfer pricing rules to address tax-related transactions, where the arms length principle is applicable.
"Simply put, this is to ensure that any company operating under these laws have a system of pricing within the firm that does not put Jamaica at a disadvantage, and these rules will be specified in the regulations," the minister said.
The regulations in respect of the auditing and assessment methodology should be available by the end of October, and the transfer price rules are at a discussion stage with a multilateral agency which has offered assistance in drafting the rules, he said.
Phillips was supported by Minister of Industry, Investment and Commerce Anthony Hylton, and Opposition spokesman on finance, Audley Shaw.
The Bill, which is seeking to amend the Income Tax Act to give effect to the initiative, which was tabled in the House of Representatives last week Tuesday, received unanimous approval from the House, yesterday.