New interim measures governing waivers


Effective Monday November 15, a set of interim measures governing the granting of waivers is in force and will remain so until a long-term policy and strategy has been finalised.
A statement released by the Ministry of Finance and the Public Service explained that since August 1, 2010, the Government had refrained from promoting or tabling in Parliament the introduction of new statutory waivers or extension of existing waivers.
The interim measures being implemented constitute “an extension or continuation of this strategy to develop a long term waiver policy and strategy,” the statement noted.
The interim measures that will be enforced until this long term policy and strategy have been finalized are:
Effective November 15, 2010: The Government establishes a freeze on all discretionary waivers of all taxes and import duties, excepting those for humanitarian purposes and charitable organisations.
The following organisations or entities will be the ones considered for tax relief under humanitarian and charitable purposes:Food for the PoorMissionaries for the PoorChurches and service clubs that receive donations to benefit the community as a wholeFoundations set up for charitable objectsJamaica Red CrossSchool for the BlindCentre for the DeafWorld relief organisations that are intended to benefit communities as a whole.
Unspecified waivers up to a monthly maximum equivalent to one third of the average non charitable waivers approved between May 1 and July 31, 2010. The extension or granting of waivers is prohibited when the amount of tax waivers requested and the fiscal revenue foregone is not known. No new agreements will be entered into, which do not include the tax expenditure as it relates to services to be rendered as a part of the agreement.
Effective November 15, the Ministry will suspend the duty regime/concessions on the rental vehicle industry (u-drive) and the tourism sector. Any waiver for any type of tax for this sector or activities would have to be subject to the cap agreed.
Effective November 15, only farms or farmers listed with the Rural Agricultural Development Authority (RADA), or designated as prescribed agricultural activity as provided for under Section 36 (d) of the Income Tax Act, can apply for motor vehicle concessions (that is, panel vans and pick-ups (not exceeding two (2) tons); trucks (exceeding two (2) tons); tractor heads and trailers.
There will be a limit on the number of motor vehicle concessions which can be accessed in any given year and only once every five years according to farm size, that is, small farms (1 to 10 acres) can access 1 motor vehicle every 5 years; medium-sized farms (11 to 50 acres) can access 2 motor vehicles every 5 years; and large farms (over 50 acres) can access 3 motor vehicles every five years.
Economic activity that will benefit from tax relief relate to the following:Growing of food cropsSeed growingGrowing of trees for the purpose of producing timberGrowing of tobaccoFishing and fish farmingBreeding of beef and dairy cattle, pigs, sheep, horses and goatsHorticultureProduction of fertile eggs for hatchingProduction of table eggsApiculture (bee farming)
Effective November 15, 2010, no new tax holidays will be granted.
Effective December 1, 2010, there will be no amnesty/waiver on tax arrears, penalties and interest charged except those specifically provided for by legislation and existing arrangements.
Effective January 1, 2011, interest rates charged on outstanding principal income tax payments will be reviewed annually to coincide with the tax year and adjusted based on the domestic commercial bank overall average weighted loan rate, plus a premium.
Effective March 31, 2011, there will be no renewal of the waivers for the upfront payment of GCT under the Modernisation of Industry Programme.
All discretionary and statutory waivers granted will be published on the Web Site of the Ministry of Finance and the Public Service on a monthly basis, ad perpetuum, with detailed information on: beneficiary sectors and entities; type of tax and amount waived by each tax; and the description of the type of merchandise, good or service that was subject to waiver under any tax. This data will be published no later than the end of the month immediately following the month being reported.

JIS Social