GCT Act To Be Amended

Amendments to the General Consumption Tax (GCT) Act are expected to be tabled in the House by June 2014.

The main objectives of the reform of the GCT Act are to broaden the tax base and improve its administration.

This is contained in the Supplementary Memorandum of Economic and Fiscal Policies, submitted to the International Monetary Fund (IMF).

The document was tabled in the House of Representatives on March 25 by Minister of Finance and Planning, Dr. the Hon. Peter Phillips.

Under the reform measures, the zero rating for government purchases will be eliminated, effective in the 2014/15 fiscal year by way of a Provisional Order, and has been included in the revenue and expenditure estimates for the 2014/15 budget.

Also, there will be a broadening of the application of GCT and Special Consumption Tax (SCT) on motor vehicles, including amending the GCT Act to allow for the payment of GCT on vehicles over 10 years (initially by way of a Provisional Order).

The amendments will also curtail the availability of a reduced rate of SCT on selected motor vehicle imports by limiting the Cost and Insurance Freight value to US$35,000 afforded to pick-up trucks used for agricultural activity.

The amended Bill also has provisions facilitating the elimination of the exempt status of electricity for independent private power producers.

It also states that as of July 1, 2014, start-up companies will be allowed to claim GCT refunds for excess credit immediately.