Jamaica has established the following departments to handle tax administration:
- Tax Administration Jamaica (TAJ) operates as a revenue authority (reporting to the Ministry of Finance) whose functions include compliance and tax collection, administrative and legal support, audit and assessment of income tax, general consumption tax, stamp duty, and transfer tax. The Commissioner General, TAJ has responsibility for the direction, supervision, and administration of TAJ and is supported in undertaking this role by several Deputy Commissioner Generals.
- The Revenue Appeals Division of the Ministry of Finance processes appeals to decisions made by TAJ.
- The Jamaica Customs Agency has the powers of an executive agency and has responsibility for administering taxes at the ports of entry as well as trade facilitation.
There is also a Financial Investigations Division in the Ministry of Finance, which investigates customs breaches and fraudulent acts in respect of tax legislation.
A corporation is subject to tax on its income for a calendar year. However, where the Commissioner General, TAJ is satisfied that a corporation normally prepares financial statements to a date other than 31 December, the company may be permitted to use the profits of its own financial year rather than the calendar year as the basis of assessment. The basis period should not exceed 12 months; however, a company wishing to file its income tax return for a period exceeding this period must obtain the approval of TAJ.
Income tax returns are due for filing by 15 March in the year following the year of assessment and are based on a system of self-assessment of the tax payable.
Payment of tax
Tax is payable in quarterly instalments on the 15th day of March, June, September, and December of each tax year. Quarterly instalments are based on an estimate of the year's liability or the actual tax payable for the previous year. The balance of income tax payable for a taxation year, after deduction of the instalments of estimated tax, is due on 15 March of the following year. Interest is charged on unpaid tax at a rate of 16.62% per annum while the amount remains unpaid. A penalty of up to 50% may also be imposed if TAJ issues an assessment.
TAJ has implemented an electronic tax system that taxpayers are required to use to file various tax returns and remit taxes online.
Tax assessments and audits
The Commissioner General, TAJ is empowered to conduct audits on selected tax returns or to assess a taxpayer for additional tax at any time prior to the expiration of the statute of limitation, which is six years, except in certain cases. Tax audits can be carried out whether or not notices of assessment have been issued. Tax assessments may be raised where the Commissioner General, TAJ is of the opinion that a taxpayer has been assessed for less tax than the taxpayer ought to have been charged, or where the taxpayer failed to file a tax return.
Topics of focus for tax authorities
The Jamaican revenue authorities have indicated that their focus is centred around improving tax collections, enhancing voluntary compliance, increasing audit coverage, and improving the ease with which taxpayers conduct business.
In recent times, TAJ has conducted comprehensive audits that cover multiple tax types. However, it continues to focus its compliance strategies on large taxpayers and has strengthened the resources of the Large Taxpayer Office to facilitate this.
TAJ has also turned its attention to administering the transfer pricing regime implemented in 2015.