Govt. intends to consolidate taxes into single payroll deduction; set later deadline for annual tax filing
KINGSTON, JAMAICA — Pricewaterhouse Coopers (PwC) Jamaica has welcomed tax changes proposed by the government in its 2022/2023 budget, suggesting such adjustments will benefit employers and employees alike.
This follows Minister of Finance Nigel Clarke announcing last week that the government intends to consolidate into “a single payroll deduction” taxes that are currently separated into several different state agencies.
In its official review of the government’s budget, PwC said, “This announcement is welcome as reform in this area is overdue.”
It added, “Jamaica imposes multiple statutory levies and contributions on employers, employees and the self-employed — NHT, NIS and HEART contributions, as well as Education Tax…
“The monthly payment/filing and annual filing of these amounts were consolidated some years ago, but the underlying rules governing their imposition have remained unchanged.
“To reduce complexity and inequity in their application, the underlying base and manner in which they are imposed needs to be harmonized.”
PwC lamented, however, that “no further information was provided as to how it is proposed to be done” and that the government has not disclosed whether tax rates will change along with the consolidation.
“So,” the organization said, “we await further details from the Ministry of Finance on this proposal.”
Additional tax changes
PwC also pointed out that Clarke last year said the government planned to adjust the annual filing deadline for income tax returns from March 15 to April 15.
“At present, most annual income tax is collected two weeks before the end of the fiscal year,” PwC noted.
“This adversely impacts the ability to conduct fiscal planning during the year. We continue to await details of how this will be implemented, including transition provisions.
“This reform is much needed as Jamaica’s tax-filing deadline is very tight by international standards and is not staggered based on one’s financial year-end like other jurisdictions.
“Most businesses prepare financial statements up to December 31. This leaves just 10 weeks between their financial year end and tax filing obligation...
“This puts undue pressure on taxpayers, their employees, external auditors, tax advisors and TAJ to complete their respective roles in such a compressed time period.
“We welcome receiving further information on this proposed reform.”
Pricewaterhouse Coopers Jamaica 2022/23 Budget Review - https://www.pwc.com/jm/en/services/tax/pdf/pwc-jamaica-2022-23-budget-review.pdf