Taxes and statutory deductions - National Insurance Scheme

Kimala Bennett, Guest Writer

National Insurance Scheme

Every JamaicaN over 18 years old and every business or company needs to have a National Insurance Scheme (NIS) number.

NIS is a compulsory contributory-funded social-security scheme, covering all employed persons in Jamaica. It offers some free protection to the worker and his or her family against loss of income arising from injury on the job, sickness, retirement, and or death of the breadwinner.

It is important to note that you must have a personal NIS number in order to register your business with the NIS and receive a business NIS number.

Here are some key terms to note when doing business with the NIS.

NIS Registration Letter: This letter indicates that the business is registered with the NIS.

NIS Clearance Letter: This letter indicates the business' status with the NIS at a specific date.

NIS Deduction Card: This is used to record the salaries and contributions of each employee for a particular year.

NIS Remittance Card: This card is used when paying NIS contributions on behalf of your employees in the organisation. The total contribution is five per cent - 2.5 per cent employee contribution and 2.5 per cent employer contribution.

NIS Stamp Card: This card is for contributions by the self-employed (sole trader/partnership) and is used by affixing NIS stamps to the respective slots on the card.

NIS Stamps: These are specially marked stamps which can be purchased at any post office islandwide or at the NIS head office.

Applying for your TRN

Your taxpayer registration number (TRN) will be your constant companion when doing any sort of business - like paying taxes, registering your vehicles, etc - with the Government. Simply put, it is a nine-digit number that each person, business, organisation (non-profit, partnership, charity, etc) is given by the Government for identification.

It is important to note that before you get a business TRN, you will need to have a personal TRN.

To get your business TRN, go to the Taxpayer Registration Centre or to your nearest tax office (except Cross Roads or King Street branches) and ask for taxpayer services.

If you are a sole trader, the digits 0001 will be added to your personal TRN. For example, if your personal TRN is 104-221-245, your business TRN will be 104-221-245-0001.

Under Jamaican law, it is an offence not to have a TRN. You will be required to pay serious penalties if you are conducting business without a TRN. If you are unable to pay the fines, you may face jail time.

GCT threshold

In order for you to charge general consumption tax (GCT) to your clients/customers, your business must make more than J$3 million within a 12-month period in total sales, not profit.

If you are or think you will make more than J$3 million in sales within 12 months, you will be considered a 'registered taxpayer' and will need to pay GCT.

If you think you will make less than J$3 million in sales over 12 months, you will be considered a 'registered person', and you will not need to collect GCT from your customers just yet, but you will need to register for GCT.

All businesses, whether they are making more or less than J$3 million, are required to register for GCT.

Tax information is now accessible through a customer-care centre - also known as the tax help line - by calling the hotline at 1-888-TAX-HELP (1-888-829-4357). You may also email questions to taxhelp@tasd.gov.jm.

If for any reason you have difficulties making your tax payments, discuss your situation with your collector of taxes to make an arrangement instead of neglecting to pay them.

Applying for a TCC

A tax-compliance certificate (TCC) is a document showing proof that all your payments and filings are up to date. You can apply for this certificate after the business/company is registered. You may be asked to get one simply to prove that your taxes are all paid up.

TCCs are usually valid for one-six months from the date of issue.

To get a TCC, you will need to visit the compli-ance section at the tax office where they will verify that your taxes have been paid, and issue you a clearance letter, which you will need to take to the Taxpayer Services Department, where you will receive your TCC.

You can only collect a TCC from the following nine tax offices: King Street in Kingston; Constant Spring Road in St Andrew; Spanish Town in St Catherine; Mandeville in Manchester; May Pen, Clarendon; Savanna-la-Mar, Westmoreland; Santa Cruz, St Elizabeth; Montego Bay, St James; and St Ann's Bay, St Ann.

Kimala Bennett is a film director/entrepreneur and author of 'Starting a Business in Jamaica'.jamaicabusinesslab@gmail.com