By Lavern Clarke, Staff ReporterTHE FOUR per cent cess on imports will be applicable to individual travellers whose purchases exceed US$500. However, unlike businesses, the ordinary vacationer will not get the opportunity to offset the charge against future tax liabilities.
For commercial interests, the cess, which is to be calculated on the cost, insurance and freight (CIF) value of the goods, will be treated as a pre-payment on income tax, but the personal traveller has to absorb the charge, in addition to paying any duties that are assessed on the goods, the tax department said yesterday.
Companies can claim the cess as credit when they file their income tax returns, but Tax Commissioner, Clive Nicholas, told The Gleaner that individuals will not have the same option, whether they are on the Pay-As-You-Earn (PAYE) roll or file annual returns.
If the traveller spends US$800, for example, then the four per cent cess will be applied to US$300.
Meantime, private sector interests will propose to the Government that it cuts the four per cent charge to two per cent, as one of a number of measures to reduce the impact of the new tax measure on businesses.
The trade associations that collaborated on the proposal say they have come up with a number of alternatives, in addition to the two per cent proposal, to satisfy Finance Minister, Dr. Omar Davies, that their plan would not leave the treasury with less than the $3 billion he hopes to collect.
PROPOSALS TO BE PRESENTED
"There are certain things we believe are preferable (to the cess)," said Trevor Fearon, of the Jamaica Chamber of Commerce. Dr. Davies "has promised to consider them all to see which mix will give them the revenues," he added.
But neither Chamber of Commerce president, Michael Ammar, Jnr., nor his Private Sector Organisation of Jamaica counterpart, Beverley Lopez, were prepared even to hint at the other proposals. The group will seek audience with Dr. Davies on his return to the island from the United States this week, to put the proposals to him formally. They will only make them public after those discussions, said Mr. Ammar, Jnr.
Mr. Nicholas said he knew of the two per cent proposal but was equally evasive about the other measures, noting that it was up to the Government to review and decide on the issue.
