JIS News

Story Highlights

  • Government is working to conclude by June 2014, arrangements regarding the registration and certification procedures for businesses that will access the Productive Input Relief (PIR).
  • PIR is a component of the new Omnibus Tax Incentive regime.
  • Under this aspect of the regime, provision is made for a reduction of the tax related cost of productivity inputs by providing tax relief on imported operating inputs.

Government is working to conclude by June 2014, arrangements regarding the registration and certification procedures for businesses that will access the Productive Input Relief (PIR) component of the new Omnibus Tax Incentive regime.

Under this aspect of the regime, provision is made for a reduction of the tax related cost of productivity inputs by providing tax relief on imported operating inputs.

The PIR applies to all inputs, including consumer goods (such as carpets and fans for the tourism sector, or recording equipment for the creative industries), once these are directly used as raw materials, intermediate goods, or consumer goods in the production process.

Making the disclosure while opening the 2014/15 Budget Debate in Parliament on April 17, Finance and Planning Minister, Dr. the Hon. Peter Phillips, noted that discussions are currently taking place with the manufacturing and tourism sectors to iron out certain aspects of the PIR system.

The Minister pointed out that one outstanding area in the system concerns the tourism transportation sub-sector – U-Drive, Contract Carriage and Tour Operators.

He noted that under the old regime of waivers, these operators were provided with concessionary rates at the discretion of the Minister of Finance in order for them to offer competitive prices for their services. These powers have  now been removed and Dr. Phillips pointed out that without these concessionary rates operators are at a disadvantage.

“Motor vehicles are essential inputs to the services that these operators provide in much the same way as some ‘consumer goods’ are an input to the accommodation and attraction sub-sectors.  Similar treatments ought therefore to be accorded to the operators in the tourism transportation sub-sector. It is proposed that vehicles for this subsector be allowed to be imported free of customs duty, but continue to be subject to General Consumption Tax (GCT) and Special Consumption Tax (SCT),” Dr. Phillips said.

He further noted that the specific mechanism on this new regime has been agreed and awaits a decision by Cabinet to authorise appropriate changes to the legislation.