Omnibus Tax Incentives Act
The Government’s current incentives regime is governed largely by the Omnibus Tax Incentives Act. The four pieces of legislation, which comprise the Omnibus Tax Incentive regime, are the Stamp Duty (Amendment of Schedule) Order Resolution, the Customs and Tariffs Revision (Amendment) Order Resolution, the Income Tax Relief (Large-Scale Projects and Pioneer Industries) Act, and the Fiscal Incentives (Miscellaneous Provisions) Act, 2013. The Fiscal Incentives Act provides for the reduction of the effective corporate income tax rate by applying Employment Tax Credit (ETC) at a maximum value of 30%. The Income Tax Relief (Large-Scale Projects and Pioneer Industries ) provides for an improved and more attractive ETC for large-scale projects and/or pioneering projects. Large Scale projects will be identified as such based on the value of the capital expenditure, employment created and business linkages secured. Pioneer Industries projects are identified as those employing new, cutting edge and innovative methodologies and technologies. Such projects need not be large in scale. A Customs Tariff (Revision) Resolution provides for the duty free importation of capital equipment and raw material. Special categories will be created for persons in the manufacturing, tourism and Creative industries to benefit from a duty rate of 0% for industry-related consumer goods. A Stamp Duty provides stamp duty exemption on raw materials and non-consumer goods.
The Jamaica Export Free Zone Act
The Jamaica Export Free Zone Act allows for companies designated with the Free Zone status are permitted to import items free of customs duty, value-added tax (called the General Consumption Tax – GCT) and other port related taxes and charges for an indeterminate period.
There are five Jamaican Free Zones:
• Kingston Free Zone (KFZ)
• Montego Bay Free Zone (MBFZ)
• Garmex Free Zone
• Hayes Free Zone
• Cazoumar Free Zone
Urban Renewal (Tax Relief) Act
This Act provides a framework for granting incentives to those who invest in the development, rehabilitation or refurbishing of land or buildings in areas declared as Special Development Areas (SDAs) through the Tax Incentive Programme. Bonds may be issued/underwritten by licensed financial institutions to mobilize funds to finance projects in the SDAs. The issuer and investors in the bonds will enjoy tax-free interest on the bonds. Investment Tax Credit of 33.3% can be enjoyed on capital sums invested for the improvement to property (buildings, parking facilities, landscaping and facade improvements) during the incentive period. Full relief from income tax on any rental/lease from the improved property during the incentive period. Additionally, during the incentive period, every transfer of title to any improved property, property to be improved, or lands, by an approved developer, is exempted from transfer tax and stamp duty.
The Export Industry Encouragement Act
This Act allows manufacturers or exporters of manufactured products exclusively for sale outside of Jamaica and other CARICOM countries, to receive 10 years of income tax relief plus exemptions on duty for imported machinery and raw materials.
The Modernisation of Industry Programme
This Act allows for relief on Capital Equipment for adopting productivity-oriented processes.
The Industrial Incentives Act
This Act applies to companies that produce primarily for sale on the Jamaican market. If the business is a producer of an ‘approved product’ in an ‘approved enterprise’, then the producer may be exempt from the payment of income tax for a period of time, depending on the product.
Bauxite and Alumina Industries (Encouragement) Act
A business engaged in the mining of bauxite or the production of alumina in Jamaica receives concessions on capital goods, lubricating oils, grease and other chemicals under this Act.