Persons standing in line at a tax office. - FILE
TAXPAYERS ARE entitled to certain deductions in arriving at their taxable income. This feature looks at the deductions allowable to self-employed persons operating small businesses.
CAPITAL ALLOWANCES: Depreciation is not allowed for income tax purposes, but instead a capital allowance is given for wear and tear of assets used in a business operation, which is deductible. The applicable rate depends on the type of asset. If any capital allowance is claimed, a Schedule 2 Capital Allowances Schedule should be attached to the annual return.
DONATIONS: Allowable donations are for amounts donated to charitable or educational institutions approved by Order of the Minister of Finance. Donations must not exceed 5 per cent or one-twentieth of statutory income for it to be
treated as an allowable deduction. The list of
charitable organisations is available online at www.jamaicatax.gov.jm.
EXEMPTIONS: Certain taxpayers including pensioners and 'golden-agers', that is persons 65 years and over enjoy certain tax exemptions.
"$45,000 of income derived from a statutory pension scheme (e.g. National Insurance Scheme) or a superannuation scheme approved by the
commissioner of taxpayer audit and assessment, is exempt from tax.
"$45,000 of income from pension and any other source is exempt from tax if 55 years or over. If permanently incapacitated, the total income from salary and pension is exempted. Persons who are permanently incapacitated must be certified as being disabled by the minister for social security on the advice of the chief medical officer, ministry of health.
"$45,000 of income derived from any source is exempt if 65 years or over."
COVENANTED DONATIONS: Refers to any amount paid in respect of annuities or other annual payments secured by deed of covenant in favour of the University of the West Indies, the University of Technology or any other approved institution. Proof of any such payment must accompany the annual return of the person claiming the exemption.
Additional tax information is available through the toll-free tax information line at
1-888-TAX-HELP (1-888-829-4357) or
online at www.jamaicatax.gov.jm.
