Durrant Pate/Contributor

A new solution that will enable retail, non-prescribed investors getting easier access to their withholding tax certificates on Tax Administration Jamaica (TAJ) RAIS platform to reclaim withholding tax on interest paid on bonds purchased is now available.

The Jamaica Central Securities Depository (JCSD), subsidiary of the Jamaica Stock Exchange (JSE) in association with TAJ and the Jamaica Securities Dealers Association (JSDA), recently launched the solution.

Previously, while prescribed institutional investors were facilitated in this regard, retail investors were not able to re-coup tax on interest paid on purchased bonds on the secondary market. 

This was due to the inability to generate tax certificates to claim refunds on the TAJ RAIS platform. This new solution will allow the Issuers of the bonds to grant the JCSD Trustee Services, as paying agent, access to the platform to file their withholding taxes as “casual”.

Previously with a bond on the secondary market, retail investors paid gross interest to acquire the security. This new solution will now enable retail investors to pay net of withholding tax.

This development will reduce the purchase costs of bonds to retail investors while reducing the need for brokers to absorb the costs of withholding tax from investors, who cannot reclaim withholding taxes paid on purchases made on the secondary market. The solution works with bonds under the management of the JCSD and JCSDTS.

Stacy Ann Tait, chairperson of the JSDA market deepening committee, states, “this solution improves retail investors experience and will contribute to accurate price discovery for local corporate bond purchases especially those done for bonds listed on the JSE private market”.

Committee member and JCSD Trustee Services general manager, Andrea Kelly, thanked TAJ and the committee for its support and commitment to such a monumental change, which will contribute to the market deepening and the development of new products by market players.

She also praised the JSDA for its support and involvement in finalising the recommendation, which led to the TAJ’s approval.