Payroll tax amalgamation set for January
Published:Friday | December 10, 2010 | 12:00 AM
The amalgamation of payroll taxes, including contributions and deductions, will take effect in January, whereby employers will no longer be required to cut separate cheques to different statutory institutions that are funded from earnings of working people and companies.
But the Tax Administration Services Department is already testing the new policy, even before it is fully formalised.
A flyer has gone out to employers and the public advising that as at December 1, all cheque payments through the Inland Revenue Department, including those being paid to the National Insurance Scheme (NIS) and HEART Trust/ NTA, are to be made out to 'Collector of Taxes'. The same applies for payments being made through Large Taxpayer Organisations (LTOs).
It said in a separate advisory Tuesday that National Housing Trust (NHT) payments were "not being collected at this time" until the January switchover to a single remittance form.
Tax Administration calls the change a streamlining of Inland Revenue's operations for control in its revenue accounting.
"As a result of the change, the cashiers at the IRD will no longer be able to accept cheques made payable to other agencies, for which collection services are provided," the advisory said.
"Employers, in particular, are, therefore, advised that they should discontinue the practice of making cheques payable to NIS and HEART, once the payment is being made through a tax office or the LTO."
The amalgamation of payroll taxes, which will also include payments to the NHT, is part of a broader tax reform project under which Government also plans to deconstruct the systems for payment of domestic taxes and those linked to international trade.
Three tax departments - Inland Revenue, Taxpayer Audit & Assessment, and Tax Administra-tion Services Department - are being merged to form a new agency called Jamaica Tax Administration (JTA), with responsibility for administering domestic taxes.
And, the Customs Department is being upgraded into an executive agency.
Tax Administration has not given a precise timeline for the single cheque payment of payroll taxes inline at tax offices, only that it would happen sometime between January 1 and January 31.
JTA is to become operational by April, while Custom's transformation has a March deadline.
The Tax Administration Reform Project, ongoing since January 2009, is being led by Financial Secretary Dr Wesley Hughes.