KINGSTON, Jamaica — Prime Minister Andrew Holness has set a January 2026 target for implementing a consolidated payroll tax system, marking a significant step towards overhauling Jamaica’s tax framework.

The single payroll tax deduction system, first proposed in 2007, has languished through successive administrations without resolution. Holness stated that the Tax Administration of Jamaica (TAJ) has been given a firm deadline to ensure the system is ready within two years, aiming to simplify the compliance process for employers and employees alike.

“The single social contribution system has been discussed for far too long, meandering through successive administrations without getting done. By January 2026, we intend to change that,” Holness stated. He was speaking at the opening of the Jamaica Stock Exchange (JSE) Regional Conference on Tuesday.

The payroll tax overhaul comes as part of a broader agenda, which includes raising the General Consumption Tax (GCT) threshold for small businesses and plans to incentivise Jamaican companies domiciled abroad to return their operations home.

Holness suggested further increases could help smaller enterprises focus on expansion rather than grappling with compliance requirements.

“In 2019, my administration increased the threshold from $3 million to $10 million. We are now looking at a further increase to remove burdens from small businesses and allow them to grow,” he said.

To encourage Jamaican companies domiciled abroad to return their operations to Jamaica, the government is developing tax legislation that would incentivise the repatriation of business activities, assets, and profits.

“We recognise that many Jamaican companies have chosen to domicile in other jurisdictions. We want to bring them back home and make it very favourable for them to do so,” Holness said.

The prime minister also outlined plans to revamp the Urban Renewal Tax Credit to stimulate investments in underserved areas.

“By restructuring this framework and expanding the geographical areas eligible for the incentive, we can attract greater investments into communities that need it most, transforming them into economic hubs,” he explained. He added that the government’s broader vision includes establishing new urban centres in each parish to drive local economic activity.

Holness highlighted the government’s commitment to modernising tax administration systems through digital transformation.

“Expanding online tax payment systems and making tax processes simpler and more accessible are essential steps toward reducing compliance burdens,” he said.

Reviews of existing tax incentives and regulations are also underway to enhance Jamaica’s competitiveness in the global market.

— Karena Bennett