RAJ News

Get the Facts – New Tax Initiatives

May 10, 2019 | Education

Jamaicans on April 1 began experiencing the impact of several new tax measures as announced by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke in opening the 2019/20 budget debates at Gordon House in Kingston on March 7th. These included: the abolishment of the Minimum Business Tax, Stamp Duty reduction, a reduction in Transfer Tax and an increase in the Transfer Tax Threshold.

 

Abolition of the Minimum Business Tax (MBT)

This means registered companies are no longer required to pay this annual liability of $60,000. Notwithstanding the abolition of the MBT, the following should be noted:
• Persons who are in arrears for the MBT for prior years are still liable for the tax and the relevant charges that may arise
• Persons who have paid MBT for 2019 are entitled to a refund

Stamp Duty Reduction

The reforms also saw the replacement of all Ad Valorem Stamp Duty rates – payable on any instrument in accordance with the Stamp Duty Act, including the granting of security as collateral for loans -with a specific (flat rate) stamp duty of $5,000 per document.
Ad Valorem Stamp Duty is a tax that is calculated as a fraction or proportion of the amount payable for the transaction. A Flat Rate Stamp Duty is a fixed amount of stamp duty payable and does not change, regardless of the value of the transaction.

As such:
• $100 will be collected per document /parcel related to transactions valued below $500,000

• $5,000 per document for transactions in the amount of $500,000 or more

Reduction in Transfer Tax payable on the transfer of real property and financial instruments

The Transfer Tax payable on properties to be transferred from one owner to the other was reduced from five percent to two percent. However, documents that have been dated before April 1, 2019 will retain the previous transfer fee of five percent of the value of the property.

Increase in the Transfer Tax (Estate Tax) Threshold for Estates

The tax threshold in the case where the estate of a deceased person is to be transferred, was increased from $100,000 to $10 million. Beneficiaries will be able to use the equity in inherited property to leverage economic opportunities.

For further information, contact:

Tax Administration Jamaica
Communications Department
Telephone: 876- 922-8742/ 876-922-8750
Email: communications@taj.gov.jm
Website: www.jamaicatax.gov.jm

https://jis.gov.jm/information/get-the-facts/get-the-facts-new-tax-initiatives/

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