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Institute of Chartered Accountants of Jamaica
PRESENTATION TO JAMAICA
CHAMBER OF COMMERCE
GENERAL CONSUMPTION TAX AND OTHER
UPDATES
Presented By
PRUNELLA VASSELL
INTRODUCTION
In our presentation today we will mainly be
dealing with
1. Recent Changes to the GCT Act;
2. Their Implications; and
3. Effects on businesses
INTRODUCTION (cont’d)
We will commence with:
 An over view of General Consumption Tax
(GCT)
 The GCT Regulations and their applicability
 Recently enacted provisions and their effect
OVERVIEW OF GCT
 Most if not all of us are aware that GCT was:
Introduced in Jamaica almost 24 years ago
As a Value Added Tax
At a rate of 10% and moved up to 17.5% - now
down to 16.5% - Standard Rate
Other rates have also been introduced to
specified goods/services
OVERVIEW OF GCT (cont’d)
 At commencement differentiation was made
between:
 Taxable Supplies
 Exempt Supplies
 With Taxable Supplies further classified as


Taxable at standard rate
Taxable at Zero Rate
OVERVIEW OF GCT (cont’d)
 Persons were required to register for GCT
purposes if such person
were engaged in a ‘Taxable Activity’
Registration would be either as –
A Registered Taxpayer; or
A Registered Person
OVERVIEW OF GCT (cont’d)
 Penalties for failing to register
 The Act also included various provisions
regarding:




Definitions of certain specific terms used
What goods/services are taxable/exempt or
zero rated
What is a tax invoice
What is a tax point etc
The GCT Regulations
 The registration, Assessment and Objection
processes
 Regulations were also introduced to deal with
various situations including
1.Registration & Application for Registration
2.Display of Certificate of Registration
3.Maintenance of Records by:
Revenue
Taxpayer
The GCT Regulations(cont’d)
 4. Return & Payment of Tax
 5. The Tax Invoice
 6. The Accounting Basis for GCT
 7. Calculation of the Tax
 8. Input Tax – how and by whom claimable
and the amount which may be claimed in
different circumstances
 9. Treatment of Bad Debts
RECENT LEGISLATIONS AND
THEIR EFFECT
Provisions introduced per 2012/2013 Revenue
Measures




Reduction in the standard rate of GCT;
Reduction in the number of Exempt/Zero rated
Supplies
Taxing of electricity for commercial use at the
standard rate (previously 10%);
Removal of GCT from residential electricity
RECENT LEGISLATIONS AND
THEIR EFFECT (cont’d)
Provisions introduced per 2013/2014 Revenue
Measures
 Imposition of GCT on telephone call tax – not
claimable as input tax;
 Accounting for GCT on the face value of
prepaid vouchers/airtime (re phone cards);
 Including all fees, taxes and other charges
when calculating GCT payable at the ports of
entry.
RECENT LEGISLATIONS AND
THEIR EFFECT (cont’d)
Provisions introduced per 2014/2015 Revenue
Measures
 Allowance of 100% input Tax on Fixed
Assets
 Maximum penalty of $100,000 on late filing of
GCT Return
 Implementation of GCT on Imported Services
 Revision to the rules relating to Deferment of
GCT
RECENT LEGISLATIONS AND
THEIR EFFECT (cont’d)
Provisions introduced per 2015/2016 Revenue
Measures
 Increase in the Special Consumption Tax
(SCT) on cigarettes – 18th March 2015
 Increase in the specific SCT rates on Petrol $7 per litre – 18th March 2015
 Replacement of 1% Petroleum Cess with a
specific SCT of $2 per litre.
 Re-imposition of GCT - on residential
electricity consumption – 1st April 2015
RECENT LEGISLATIONS AND
THEIR EFFECT (cont’d)
Provisions introduced per 2015/2016 Revenue
Measures (cont’d)
 Full Implementation of the elimination of zero-
rating under the GCT Act for government
purchases (with the exception of schools and
the Jamaica Defence Force)
Other Matters
 Revised GCT Forms
 Revision to interest on late payment
 Requirements to file online particularly if


Refund being claimed
Requires set off of input tax credit with regard to
purchases to Withholding Tax Entities (
government institutions)
 Need to ensure no “sense” when preparing
GCT return
INCOME TAX MATTERS
 1 Law revised to require applicable persons
to file tax return whether or not:
Liable to pay tax;
 Has income from any source for year of
assessment
Applicable persons are
Body Corporate
A Trust or other Institution - Charities Act
Any person (including an individual) who
carries on a trade, profession or vocation or
business and who is prescribed

INCOME TAX MATTERS
(cont’d)
 Disclosure of Information on Tax Debtor to a
Credit Bureau
 Establishment of Electronic Communication
system
 Application of payments made
 Sweeping penalties for failure to file income
tax & E/Tax returns