Locally Recruited Employees of World Bank Exempted from Paying Income Tax

The House of Representatives, on Tuesday (February 19), passed legislation to allow for the exemption of locally recruited employees of the World Bank from the payment of income tax.

The legislation, Bretton Woods Agreements (Amendment) Act, was piloted by Minister of Finance and the Public Service, Hon. Fayval Williams.

Mrs. Williams explained that the Bretton Woods Agreement Act incorporates into domestic law, Jamaica’s accession to the articles of agreement, which governs the operations of the international multilateral arrangement, to establish the International Monetary Fund and the International Bank for Reconstruction and Development (World Bank) and related matters.

The Minister stated that among the matters addressed by the Principal Act is the tax treatment of locally recruited staff of the bank.

“Though through subsequent arrangements by the Jamaican Government to operationalise the World Bank in Jamaica, the tax treatment of Jamaican nationals employed to the bank became unclear, through the signing of an establishment agreement in 1993, that created terms and conditions that conflicted with the Principal Act. The Bill today seeks to bring clarification to this matter,” Mrs. Williams said.

For her part, Minister of Legal and Constitutional Affairs, Hon. Marlene Malahoo Forte, explained that the Bretton Woods Agreement Act provides for Jamaica’s relationship with the bank.

“Section 5, in particular, sets out the immunities and privileges of the bank in Jamaica and the appropriate provision which deals with the immunities and privileges such as income tax and exemption,” Mrs. Malahoo Forte said.

“So, the amendment is really just to bring the immunities and the exemption to persons employed to the bank in Jamaica… for Jamaican citizens. So, it is the recognition of the immunities and privileges that are accorded,” she added.