Senate passes Income Tax (Amendment) Act, 2022, paving the way

Jamaica’s Special Economic Zones (SEZs) regime has moved one step closer to conforming with international standards of tax transparency as well as improving efficiency in the administration of the regime.

This was made possible  by the Senate approving the Income Tax (Amendment) Act, 2022, which ensures the island’s SEZ regime conformity with international obligations.

Foreign Affairs and Foreign Trade Minister, Senator Kamina Johnson Smith, who piloted the legislation in the Upper House of the Jamaican parliament, explained that the amendment bill is a companion to the recently passed Special Economic Zone Amendment Act.

According to her, both pieces of legislation work together to ensure conformity with international standards of tax transparency as well as improving efficiency in the administration of the SEZ regime.

Johnson Smith posited that the Government is ensuring that it improves the administration of the regime by addressing the ambiguities that have been noted.

Johnson Smith told the Senate that the policy objective, as driven by the Ministry of Industry, Investment and Commerce, has always been to increase the economy’s productive capacity, noting that the incentives provided within the SEZs are designed to facilitate their contribution to nation-building.

“The incentives are found across multiple pieces of tax legislation, including the Income Tax Act. But it came to the Government’s attention that there were instances in which the policy was not clear or clearly articulated,” she declared.

Amendments were needed for clarity

The Government Senate leader emphasised that consequent on further international reviews of Jamaica’s SEZ regime, it was determined that amendments were needed for clarity in order for the SEZs to be compliant with our international obligations.

“Those amendments were recently undertaken and these amendments, today, now ensure that the Income Tax Act is coherently implemented together with that body of legislation,” Johnson Smith added.

The Foreign Affairs and Foreign Trade Minister explained that the amendment to clauses two and three of the bill, “ensures that the entities that offer business process outsourcing can operate in the zones and receive benefits contemplated by the SEZ Authority and the Income Tax Act, when they are taken together”.

Clause four of the bill deletes the provision in the First Schedule, which references the repealed Free Zone and Free Zones Act.

As such, both Tax Administration Jamaica and the Special Economic Zone Authority can continue to function cohesively, as intended by the policy of the Jamaican government.

Johnson Smith boasted that the Government continues to make strides in ensuring that Jamaica is the place to do business.

According to her, “before COVID, we knew that we were well on our way [to] reaping results. We were voted best destination in the Caribbean for doing business, for example, and post-Covid, business and consumer confidence are both at their strongest… . Part of this success is, of course, the Government’s strides to facilitate investment through a strong legal framework supported by various trade agreements and incentives, which are aligned with our international obligations”.