Should you be charged taxes?
Following the announcement of the revised tax package presented to Parliament on Thursday, there seem to be feelings of hopelessness and hysteria. But before you break the bank in anticipation of the massive increase in taxes on items ranging from tampons to crutches, consumers beware — not every business should be charging you taxes.
Meris Haughton, Director, Communications of the Tax Administration Services Department, on Friday said that businesses must first meet two requirements to collect General Consumption Tax (GCT) from the consumer for any product or service provided.
“Only businesses with projected sales over the GCT threshold of $3 million and are ‘registered taxpayers’ will be required to charge GCT,” Haughton said.
“Therefore, businesspersons such as small farmers, market and roadside vendors and other small operators, whose projected annual sales are below the $3 million GCT threshold and are not registered, will not be required to collect GCT,” Haughton outlined.
So you may tell your local vegetable vendor that GCT does not apply.
Minister of Finance and the Public Service Audley Shaw announced a number of revenue measures Thursday which he said form part of a programme for a stand-by arrangement with the International Monetary Fund. Included in the measures, which will take effect January 1, 2010, was an announcement that the standard rate of GCT would be increased from 16.5 per cent to 17.5 per cent.
Minister Shaw also expanded the list of items which would be subject to the revised GCT. Some of these items include: books and booklets, brochures, pamphlets and leaflets for religious purposes, sports equipment, including clothing; some medical supplies, including artificial parts of the body, canes and crutches and contact lenses; food items including fresh fruit and vegetables, ground provision, onions and garlic, meat and poultry, sugar, salt, eggs and rolled oats and services rendered by an undertaker including burial or cremation and the supply of coffins.
However, small and micro-businesses which do not meet the requirements, including those operating informally, should not collect GCT on these items from the public. However, businesses are expected to pay the taxes, and in the case of the farmer, his input cost, including the cost of animal feed and fertilisers would already include the GCT which these items attract. So what to do?
Companies must register to collect GCT. To register, companies and individuals must complete the relevant GCT application form available at any tax office or online at www.jamaicatax.gov.jm.
“It is however expected that with the announced changes, the projected gross annualised sales of some business operators will surpass the GCT threshold of $3 million,” Haughton noted. “This will require such persons to become a registered taxpayer, for the purposes of GCT.”
“Once registered, companies and individuals are required under the GCT Act to display a GCT Certificate of Registration in their establishment; issue tax invoices; charge or collect GCT; and file GCT returns,” Haugton said.
“The public is reminded that only registered taxpayers are authorised to collect GCT. Consumers should therefore ensure that GCT is only paid to a legitimate registered taxpayer with a valid GCT Registration Certificate displayed in their establishment and who provides them with a GCT invoice,” she added.
Opposition Leader and President of the People’s National Party (PNP) Portia Simpson Miller on Friday called on consumers to be on the lookout for those businesses which would capitalise on the opportunity to pre-empt the increases.
“The message is to be very vigilant. One of the things we need to look at is whether, because of the announcement, prices would begin to move before January 1,” she said.