First Look

Government to introduce Employment Tax Credit



Tax Administration Jamaica (TAJ) | 2014-01-02 00:00:00

Effective January 1, 2014 unregulated companies and self-employed individuals, engaged in a trade, vocation or profession, will be entitled to claim a non-refundable Employment Tax Credit (ETC) when computing their net income tax liability. However to qualify for the credit, the eligible persons will have to file and pay their monthly payroll statutory deductions on time.

The amount of ETC which may be claimed in respect of each year of assessment will be equivalent to the total amount of payroll deductions and contributions for Education Tax, NHT, NIS and HEART, which have both been declared and paid on time for employees during that year.  Eligible persons are therefore encouraged to file and pay their monthly payroll deductions (S01) on a timely basis in order to benefit when filing their final income tax return.

However, it should be noted that the ETC will be restricted to 30% of the tax chargeable on the company’s or trader’s income. Additionally the ETC may not be claimed against any income tax chargeable on non-trading income, such as interest and dividend income. Such income will continue to be liable to tax at 25%.

The Employment Tax Credit is being introduced as part of the government’s Fiscal Incentive regime.  This follows months of discussion by a private sector led Incentives Working Group, working in partnership with representatives of the Ministry of Finance and Planning and TAJ. While the employment tax credit will benefit some businesses, it will also serve to encourage greater tax compliance and boost employment.

 

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Posted By :Meris Haughton

Company Name : Tax Administration Jamaica (TAJ)

Website :

Company Address : PCJ Building (4th Floor) 36 Trafalgar Road Kingston 10


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