Business Process Outsourcing (BPO) companies operating within Special Economic Zones (SEZs) in Jamaica are set to benefit from the employment tax credits (ETC) added in the Income Tax (Amendment) Act, 2022.
Under the legislation, outsourcing providers could claim a credit against income tax payables for the contributions to their employees’ statutory deductions.
The Income Tax (Amendment) Act, 2022 is a bill implemented to work alongside the newly-passed Special Economic Zones (Amendment) Act, 2022. Both pieces of legislation will work together to ensure conformity with international standards of tax transparency as well as improve efficiency in the administration of SEZs in the country.
A report from Jamaica Observer added that the recent amendments were made to ensure that there are “reduced opportunities for revenue leakage locally and shifting of profits internationally.”
Leader of Government Business in the Senate and pilot of the Income Tax (Amendment) Act Kamina Johnson Smith explained that the ETC is one of the primary incentives under the principal Act, but the SEZA legislation had provisions that prohibited entities in economic zones from claiming the benefit.
The lawmaker added that the act ensures that BPO entities “can operate in the zones and receive benefits contemplated by the SEZA and the Income Tax Act when they are taken together.”