COMMISSIONER general of Tax Administration Jamaica (TAJ) Ainsley Powell says the entity has made all the necessary linkages with financial industry players to ensure that payments under the Government’s Reverse Income Tax Credit initiative will be smooth.

The reverse tax credit payment of a one-off $20,000 for persons earning less than $3 million per annum was announced by Finance Minister Nigel Clarke when he opened the Budget Debate in March. Roughly 580,000 Jamaicans who contribute to the country through statutory deductions and through personal income tax will benefit from the measure which will cost the Government $11.4 billion.

Speaking at the launch of the initiative on Wednesday morning at Jamaica Pegasus hotel in St Andrew, Powell said the TAJ prioritised the project when the announcement was made and was able to determine the scope of the policy.

He said the entity has made good on the lessons learnt from the experience under the COVID-19 Allocation of Resources to Employees (CARE) Programme which was launched in 2019 to provide cash and compassionate grants to Jamaicans earning beneath the income tax threshold at that time.

“We have engaged stakeholders in the financial services, remittance agencies and other institutions that will be handling the payment. We learnt from the CARE Programme that there were critical problems that have to be addressed in the whole process of paying out these funds terms of how payments would be done,” Powell told the audience.

“So we have reached a point where we have agreements and arrangements with most persons in the industry as to how the payments will be done and received; we developed a system that will allow online registration with an automatic validation process to determine person’s eligibility,” the TAJ commissioner general said.

In emphasising that it is a “one-off programme” for which payments have to be made within this fiscal year, Powell said workers will be able to apply up to January 2, 2025.

“We will ensure that we complete the processing for payment before March 31,” he assured.

In the meantime, noting that the TAJ expects a failure rate of 10 per cent based on data, Powell said “it means we need to assess as we go along to ensure that persons will be able to get through as easily as possible”.

“We have estimated that there are around 580,000 individuals who could be eligible for the tax credit and so we have geared ourselves to handle the volume,” he added.

Finance Minister Dr Nigel Clarke, in his remarks, said the measure was part of other efforts to alleviate inflationary pressures on Jamaicans, particularly those below the income tax threshold.

“To all the administrative clerks, store clerks, merchandisers, inventory clerks, security guards, those in quick serve restaurants, waiters, servicer, bartenders, as long as you are filing your NIS and your statutory deductions have been paid over, a one-time $20,000 grant is available for you digitally online; payment will be made to your bank or your remittance provider,” Clarke said.

Chief executive officer of the Jamaica Employers Federation O’neil Grant, commenting on the measure, described it as “a stroke of brilliance”.

“This tax credit will cause persons in the informal economy to get jealous. So that is something that as employers we welcome. It will also encourage the employers who have been tardy in filing to file more expeditiously because now their workers are going to get angry at them if they make an application and the reply is there are no returns for you,” he said.