- The recently passed Omnibus Tax Incentive legislation is expected to boost areas within the country’s manufacturing and agricultural sectors.
- The Omnibus legislation is intended to establish a transparent and coherent regime to govern all tax incentives.
- Part of the tax reform effort involves changes in the Customs tariff regime.
Finance and Planning Minister, Dr. the Hon. Peter Phillips, says the recently passed Omnibus Tax Incentive legislation is expected to, among other things, boost areas within the country’s manufacturing and agricultural sectors.
The Omnibus legislation is intended to establish a transparent and coherent regime to govern all tax incentives.
Dr. Phillips, who was speaking during an interview with Ian Boyne on the JIS’ ‘Issues and Answers’ programme recently, said that part of the tax reform effort involves changes in the Customs tariff regime.
He explained that a significant aspect of this is to zero rate all production inputs for manufacturing, agriculture, as well as for the production of tools and services, “and significantly, for us, for producers of entertainment services”.
“It’s an important part of our operations and it provides for where there are goods that would otherwise be considered consumer goods. If it is part of your production process and if you certify it to Customs as part of your ‘tools for trade’, then you get it in zero rated,” he said.
The four pieces of legislation, which comprise the Omnibus Tax Incentive regime, are the Stamp Duty (Amendment of Schedule) Order Resolution, 2013; the Customs and Tariffs Revision (Amendment) Order Resolution, 2013; the Income Tax Relief (Large-Scale Projects and Pioneer Industries) Act, 2013; and the Fiscal Incentives (Miscellaneous Provisions) Act, 2013.
Dr. Phillips said the provisions will, for example, facilitate continuous plant refurbishing, as operators will “get tax relief on all of their inputs into the business.”
Dr. Phillips informed that there is provision for “large scale and pioneering projects” to receive special treatment. He noted, however, that this will be governed by particular rules and a parliamentary approval process, rather than solely on ministerial discretion.
He added that regulations will be brought to parliament to define and clarify what is meant by large scale and pioneering enterprises.
The Finance Minister said the Omnibus Tax legislation will ensure that an equitable rules-based system is created for all players within the industry and not just those who have “access to ministerial decision-makers”.
“It also provides a very significant employment tax credit, so that persons, who employ (workers) and have statutory expenditures by virtue of the number of persons that they employ, are able to write off the cost of these employment-based expenditures.
“So that incentive is not only to provide employment, but also to pay those deductions over to the National Insurance Scheme (NIS), National Housing Trust (NHT), and education tax, because you can’t get the benefit of the credit if you don’t collect and pay over,” Dr. Phillips outlined.
The Government, under an agreement with the International Monetary Fund (IMF), committed to the passage of an Omnibus Incentives Act, as a key part of the Extended Fund Facility (EFF).