Eyes on employers

The Government’s Reverse Income Tax Credit (RITC) has put delinquent employers under the microscope amid concerns that non-filing of income tax returns may cause employees to not benefit from the initiative.

Some 50,000 applicants have reportedly been denied the benefit so far, although the specific reasons were not immediately made clear. Among the possible reasons for denial are applicants having income over $3 million, contributions not being made, and contributions not being turned over by employers.

Tax expert Allison Peart said the new cash-back programme is an exposure mechanism which reveals whether body corporates have been tax compliant.

The RITC is a financial initiative of government, designed to assist persons earning below $3 million annually, who meet the specific criteria, to receive a one-off payment of $20,000.

Approximately 219,000 Jamaicans have so far made successful applications.

“Where there is an issue with it (the initiative) is that you penalise employees for non-compliance of their employers. So, the issue becomes, is that fair?” Peart told The Gleaner.

Income tax return filings were due by March 15 but the deadline was extended to August 31 to facilitate the RITC, which was announced in March.

Peart has suggested that the deadline be further extended to October, to facilitate businesses which have not filed, to ensure that employees ultimately benefit.

The drawback, she said, is that Tax Administration Jamaica (TAJ) may not be able to do this until it determines how many employees are affected.

“I understand that you need a cut-off because you need to be able to check the system but I do feel for people who, through no fault of their own, can’t qualify.

“When you put these things into a tax policy, you always want to make sure that, what you are trying to achieve, the cost of doing it [makes sense]. Times are tough, you want to get money into the hands of people and, if you are also looking to get compliance, this will drive it. But, for people who are not compliant, you are punishing not the employer but the employee, and they have nothing to do with it,” she said.

At the same time, she said employees must make it their duty to ascertain whether employers are paying over taxes deducted.

“We have to be proactive. We can’t always just assume. It is not just the payment; it is also the filing of the info. Sometimes we pay and we don’t send the documentation,” she said.

The one-off payment is designed for individuals, including the self-employed, Pay-As-You-Earn (PAYE) employees, as well as domestic workers, who earned less than the $3 million during the year of assessment, 2023, and who would have completed their tax filings and payments for the 2023 calendar year or National Insurance Scheme Stamp Card for 2022, by August 31, 2024.

The government has estimated $11.4 billion as the cost of the initiative.

Outgoing Minister of Finance and the Public Service Dr Nigel Clarke said the initiative would provide relief to low-income earners by allowing them to enjoy the gains from Jamaica’s macroeconomic stability.

“This one-off grant of $20,000 is designed for individuals who earn less than $3 million [during assessment year 2023] and could benefit over 500,000 Jamaicans across a range of professions, including, but not limited to, government workers, administrative professionals, members of the creative industry, warehouse staff, merchandisers, security guards, office attendants, and quick-service professionals,” said Clarke.

TAJ has created a Reverse Income Tax Credit Hub on its tax portal at www.jamaicatax.gov.jm, to facilitate persons submitting applications and getting relevant information about RITC, to include Frequently Asked Questions.

Taxpayers have until December 2, 2024 to submit their applications, and will need to have at hand their Taxpayer Registration Number (TRN), valid banking information, and telephone number or email address, to complete and submit the online application.

The eligible taxpayers may also choose from a list of participating financial institutions or remittance agencies that now includes Scotiabank Jamaica, to receive the disbursements. TAJ is still in discussions to include additional financial institutions.

The government says disbursements will be made within four weeks of a confirmed application. The tax authority says individuals have the option of tracking the status of their application using the confirmation number provided during the application process.

Additionally, users of the system may opt to receive notifications via email or SMS text message.

editorial@gleanerjm.com