MINISTER without portfolio in the Ministry of Finance and the Public Service, Fayval Williams says for the fiscal year 2017/2018, Tax Administration Jamaica (TAJ) performed above expectations, topping their forecast.
“For the period the TAJ collected $307 billion, surpassing estimates by $9.2 billion or 3.2 per cent. If you look at the prior fiscal year, 2016/2017, tax revenues were $284 billion, coming from $264 billion in 2015/2016,” she noted.
The minister was speaking at a TAJ-hosted Transfer Pricing Agreement Seminar, held Hibiscus Lodge Hotel in Ocho Rios, St Ann, on Thursday.
Williams said tax collection continues to see tremendous improvements as a result of the TAJ's actions to encourage compliance.
“The TAJ's efforts to strengthen enforcement capabilities, and Government's shift from direct to indirect taxation continue to work hand in hand to propel the country's growth in tax revenues,” she noted.
The minister pointed out that Jamaica received a largely compliant rating earlier this year, up from a partially compliant rating a year ago in 2017, based on its adherence to the exchange of information on request principle.
Meanwhile, Williams said Jamaica is benefiting significantly from the introduction of the Transfer Pricing Agreement tax regime.
Parliament made amendments to the Income Tax Act in 2015 to introduce the transfer pricing regime, in keeping with best practices adopted by several tax administrations worldwide and based on international standards and the Organisation for Economic Co-operation and Development (OECD) rules.
According to the TAJ, transfer pricing is the general term for the pricing of property (including property, plant, equipment, goods and intangibles) or services in cross-border and domestic transactions between connected persons.
Minister Williams said the Transfer Pricing Agreement is among various initiatives now being employed by TAJ to improve tax compliance and promote transparency.
“Jamaica, like many countries around the globe, has been engaged in various initiatives to improve compliance [and] promote robust institutions through people, processes, technology and infrastructure,” she said.
Williams noted that in order to ensure support, the TAJ has launched a user-friendly transfer pricing hub, with useful information, legislation, articles and forms that will guide persons in the process of complying with transfer pricing obligations.
Jamaica has also been benefiting from the expertise of an international transfer pricing agreement specialist, who is in the island to provide practical support in its implementation.
Additionally the minister said a training programme, with support from the OECD, has been ongoing since 2015 to strengthen the capacity of the staff within the TAJ to administer the transfer pricing regime.
“The sum of these actions will help to safeguard Jamaica's tax space, support efforts towards a transparent predictable investment climate, as well as build a technically strong tax administration that understands taxpayers' businesses, industries and transactions,” she added.
The minister outlined that the transfer pricing regulations are essential, as “the Jamaica income tax laws are established on the basic principle that income generated from economic activity conducted in Jamaica [by foreign enterprises] is liable for income tax in Jamaica”.The seminar is one of two being hosted by the TAJ to sensitise business owners on the Transfer Pricing Agreement.