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Bill to Amend Income Tax Act Passed in the House
A Bill to amend the Income Tax Act was passed on (Jan.15) in the House of Representatives.
Minister of Finance and the Public Service, Audley Shaw, who piloted the Bill, said it seeks to allow for conformity with the Pensions (Superannuation) Fund and Retirement Scheme Act, which was passed in 2004.
"This is with respect to maximum pensions payable and enabling self- employed persons and those in non pensionable employment to effectively provide for their retirement, by providing more attractive contribution under retirement schemes," Mr. Shaw explained.
Among the provisions, is that the maximum annual contribution in respect of a superannuation fund shall not exceed 20 per cent of the employee's remuneration. This he said "is made up of a maximum contribution of 10 per cent of the employee's remuneration and 10 per cent by the employee."
"Where the employer contributes less than 10 per cent, the employee may contribute the difference. This would not have been allowable under the present regime. The contributions made by the employer and the employee are allowable deductions under the Income Tax Act," Mr. Shaw said.
In respect of a retirement scheme, the maximum annual contributions allowable as a deductible expense is 20 per cent of the chargeable income of the self employed person or 20 per cent of the emoluments of the employee inclusive of the employer's contribution, should there be any such contribution.
Mr. Shaw told the House that the amendments originated from the pension reform process, which was started by the previous administration, and which "we propose to continue as we regard it is as most important that proper arrangements are in place to enable all Jamaicans during their working life, to save towards adequate pension retirement."
Expressing support for the Bill, Opposition Member of Parliament for Southern St. Catherine, Fitz Jackson, said that it encourages "more persons, especially those who are self employed and generally those in the informal sector, to gradually integrate into the formal sector of the economy."
A Bill to amend the Income Tax Act was passed on (Jan.15) in the House of Representatives.
Minister of Finance and the Public Service, Audley Shaw, who piloted the Bill, said it seeks to allow for conformity with the Pensions (Superannuation) Fund and Retirement Scheme Act, which was passed in 2004.
"This is with respect to maximum pensions payable and enabling self- employed persons and those in non pensionable employment to effectively provide for their retirement, by providing more attractive contribution under retirement schemes," Mr. Shaw explained.
Among the provisions, is that the maximum annual contribution in respect of a superannuation fund shall not exceed 20 per cent of the employee's remuneration. This he said "is made up of a maximum contribution of 10 per cent of the employee's remuneration and 10 per cent by the employee."
"Where the employer contributes less than 10 per cent, the employee may contribute the difference. This would not have been allowable under the present regime. The contributions made by the employer and the employee are allowable deductions under the Income Tax Act," Mr. Shaw said.
In respect of a retirement scheme, the maximum annual contributions allowable as a deductible expense is 20 per cent of the chargeable income of the self employed person or 20 per cent of the emoluments of the employee inclusive of the employer's contribution, should there be any such contribution.
Mr. Shaw told the House that the amendments originated from the pension reform process, which was started by the previous administration, and which "we propose to continue as we regard it is as most important that proper arrangements are in place to enable all Jamaicans during their working life, to save towards adequate pension retirement."
Expressing support for the Bill, Opposition Member of Parliament for Southern St. Catherine, Fitz Jackson, said that it encourages "more persons, especially those who are self employed and generally those in the informal sector, to gradually integrate into the formal sector of the economy."
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