FARMERS WITH incomes derived exclusively from the carrying out of a prescribed agricultural activity can get relief of income tax under the Income Tax Act.
Prescribed agricultural activities such as:
Growing of food crops
Seed growing
Growing of trees for the purpose of producing timber
Growing of tobacco
Fishing and fish farming
Breeding of beef and dairy cattle, pigs, sheep, horses and goats
Horticulture
Production of fertile eggs for hatching
Production of table eggs
Apiculture (bee farming)
The procedure for getting Income Tax relief is as follows:
Obtain an application form from the Rural Agricultural Development Authority (RADA) parish office.
Complete an application form in duplicate, stating among other things name and address of the farmer, Taxpayer Registration Number (TRN), the location of the farm, the land tenure, number of acres, and the agricultural activities being carried out and submit the form to the RADA office for further processing.
Based on the application, officers from RADA will then visit the farm and carry out an assessment to ensure that it is a bona fide operation and that the farmer is involved in a prescribed agricultural activity. This information is forwarded to the Ministry of Agriculture for further processing.
The Ministry of Agriculture then forwards its recommendations to the Tax Administration Services Department (TASD). The recommendation is assessed and the information is forwarded to the Taxpayer Audit & Assessment Department (TAAD) to investigate and verify if tax returns are filed up to date. The findings of TAAD are then reported to TASD.
If the application meets all the qualifications, the TASD prepares the relevant order for the approval of the minister of finance. Once the minister has approved the order, it is published in the Gazette.
Once the Order has been published in the Gazette, the farmer is legally designated an Approved Farmer. This order is forwarded to all relevant parties Ministry of Agriculture (which forwards it to the applicant), Inland Revenue Department (IRD), and Taxpayer Audit and Assessment Department informing them of the farmer's exempt status.
The relief is normally for a period of ten years in the first instance, but may be extended another five years by the minister. Criteria taken into account in granting any further relief are the potential foreign exchange earnings/savings, and the viability and profitability of the
enterprise.
It should be noted that approved farmers are required to keep separate books of accounts relating to their prescribed agricultural activities and MUST still file returns by March 15 each year. In the event that any of the terms and conditions imposed is breached, the minister may revoke the order, but not before the approved farmer has been given the opportunity to explain the circumstances of his failure to comply with those terms and conditions.
Additional information on this and other tax information is available through a toll free tax information service
1-888-TAX-HELP
(1-888-829-4357) or online at www.jamaicatax.gov.jm
