House Establishes Comprehensive Statutory Framework for Environmental Protection Levy

The House of Representatives, on Tuesday (September 22), passed legislation to establish a clear and comprehensive statutory framework for the Environmental Protection Levy (EPL) applied to imported and locally manufactured goods.

The levy is intended to help address the negative impact on the environment arising from the consumption, use and disposal of those goods.

The Bill gives also retroactive effect to the imposition of the EPL, initially imposed on imported items and, thereafter, on manufactured goods via the Provisional Collection of Tax Act, from 2007 to present.

It further seeks to increase the EPL rate to 0.85 per cent from 0.5 per cent with effect from October 1, 2026, and indemnify persons against any criminal or civil liability for failure to pay any sums that were outstanding prior to that date.

Minister of Finance and the Public Service, Hon. Fayval Williams, who piloted the Environmental Protection Levy Act through the House, said the need to protect the environment is not abstract.

She noted that Jamaica’s natural resources support communities, the economy and way of life.

“At the same time, the consumption and disposal of goods can place additional pressure on waste management systems and the wider environment. The EPL, therefore, provides a fiscal measure through which these environmental impacts may be addressed,” she pointed out.

“It is intended to assist the Government in responding to those impacts and to support Jamaica’s wider environmental and climate resilience objectives,” she added.

The EPL was introduced as a part of the Revenue Measure for the fiscal year 2007/2008 at a rate of 0.5 per cent of the cost, insurance and freight (CIF) value on all imported goods.

The measure was made effective via the Provisional Collection of Tax Environmental Protection Levy No. 2 Order 2007 on June 1, 2007.

In 2015, the EPL regime was revised following operational concerns raised by the Jamaica Customs Agency and the Ministry of Foreign Affairs and Foreign Trade.

Pursuant to a 2015 Cabinet decision, the levy was extended to the sale of locally manufactured goods at a rate of 0.5 per cent applied to 75 per cent of the selling price of goods.

The levy was also reimposed on goods imported into Jamaica, including goods from CARICOM countries.

Minister Williams explained that the changes sought to secure equitable treatment across domestic and foreign markets, while mitigating commercial environmental impacts.

“This House will recall that as part of the 2026/2027 Revenue Measures, the Government proposed further revision to the EPL against heightened climate vulnerability and associated fiscal constraints,” she noted.

It was announced that the levy would move from 0.5 per cent to 0.85 per cent and will continue to be applied to 75 per cent of sales value to address concerns raised by manufacturers regarding the taxation of gross margins.

“In addition to validate, impose and collect the tax from the date of the original 2007 Order going forward, the proposed Bill will replace the expired provisional collection of tax orders to provide legal certainty for the EPL and safeguard collected revenue,” Mrs. Williams said.