Taxes are part and parcel of doing life legally in any country and serves the purpose of providing funds for the government and the nation as a whole. Investopedia defines taxes as “Mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national. Tax revenues finance government activities, including public works and services such as roads and schools, or programmes.
As we approach the tax deadline in Jamaica, Entrepreneur Weekly will be providing general information on taxes, how to file your taxes, and benefits of using the online infrastructure provided for the month of February. For this post, we will address basic definitions and some tidbits you need to know about taxation particularly as a small business owner.
Income Taxes
According to Tax Administration Jamaica, income tax “is a tax on a person’s statutory (chargeable) income. It is important that all taxpayers submit their returns and pay their taxes on time, as these funds provide the necessary income for Government to finance its expenditure on such social services as education, health care, road maintenance, national and social security.”
Income Tax Filers are being reminded that filing of their Annual Income Tax Return for the year 2022 and declaring their Estimated Income and Tax Payable for the year 2023, must be done online as required by law. With the expected increased usage of TAJ’s online platform, taxpayers are further encouraged to file and pay early to avoid the usual last-minute rush.
Tax Administration Jamaica
The TAJ is the key governing body that handles taxation in Jamaica, and they are primarily responsible for administering the Income Tax Act in respect of audits and assessments. The TAJ says, “Our responsibility is in ensuring that all the requirements of the Act are adhered to, and all taxpayers shoulder their fair share of the tax burden.” TAJ proudly operates as the country’s premiere revenue collecting agency. In keeping with their mission, their primary goal is to foster voluntary compliance, collect the revenue due in an equitable and efficient manner, contribute to a competitive business environment and facilitate economic growth and development.
What You Need to Know
Taxes become part of your journey as an entrepreneur and you must be able to give an account for the money generated by your business, and so here are some key things you need to know to help you navigate this time especially if you are a new entrepreneur. We previously defined income tax but let’s look at another word that goes along with it which is “threshold”. The TAJ defines threshold as “normally referring to that part of an individual’s statutory income which bears no tax.”
This means the level of income or money earned above which people or companies must pay tax, or must pay a higher rate of tax. According to TAJ, “Self-employed persons contribute at a rate of 6% on maximum earnings of JMD 3 million per annum. The income threshold for both employed and self-employed individuals increased to JMD 5 million per annum with effect from 1 April 2022. NIS contributions are tax deductible.”
Small Businesses/Self Employed Individuals and Taxes
March 15, 2023 is the deadline for the filing of income taxes and it must be done online. The TAJ wants to remind Taxpayers to take note of several forms, which have been revised for this filing period for greater efficiency and convenience. These forms are:
• Individual Income Tax Return form S04 for Y/A 2022
• Individual Income Tax Return form S04A for Y/A 2023
• Income Tax Return for Bodies Corporate form IT02 for Y/A 2022
The S04 form is officially known as Self-employed Persons Annual Return of INCOME, Taxes and Contributions – Form S04. The form was introduced in 2015 and the consolidated form has allowed individuals to use one form to report on their annual income tax, education tax as well as their individual NHT and NIS contributions.
JBDC Partners with TAJ or ‘TAX TALK 2023’
The JBDC has partnered with the TAJ to help Jamaican entrepreneurs with registered businesses learn how to file their taxes for this tax period. Dubbed ‘Tax Talk 2023’, The two-day virtual workshop saw day one helping entrepreneurs get ready to start the process. Approximately 200 local entrepreneurs were in attendance. Back by popular demand, there will be a repeat of Day One on February 7, 2023 at 7:30pm on Zoom. Day Two will be held on February 15, 2023 and will assist entrepreneurs with filing their taxes online. Click the flyer below to register or visit www.jbdc.net. Additionally, leading up to the deadline, Entrepreneur Weekly will be featuring helpful tips on filing taxes for your business.
Sources
https://jamaica.loopnews.com/content/tax-expert-urges-small-businesses-keep-good-records
https://www.jbdc.net/registered-business-owners-invited-to-talk-tax-2023-virtual-workshop/
https://jis.gov.jm/tax-day-countdown-begins/
https://www.jamaicatax.gov.jm/income-tax2/#Who%20must%20file%20a%20Return
