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By Camilo Thame
Friday, April 24, 2009
Finance Minister Audley Shaw's plan to charge withholding tax on non-resident shareholders of Jamaican listed companies would likely earn the government J$3.4 billion or more should firms maintain last year's dividend policy.
What's more, Canadian billionaire Michael Lee Chin and the parent of Scotia Group Jamaica (SGJ) will feel the brunt of the tax.
Audley Shaw
Last year, SGJ, which consistently pays out dividends - usually the same as the year before - forked out J$4 billion, of which J$3.1 billion went to the parent in Canada.
The tax to be applied is 33 1/3 per cent, which means that this year J$1 billion will go back to the Government.
National Commercial Bank, which has a similar dividend policy to SGJ, forked out J$2.8 billion in dividends. Lee Chin's share, which he owns through AIC, would have yielded him J$1.9 billion and would attract a tax of J$639 million.
His 47 per cent stake in Kingston Wharves would also be affected, although he only earned J$25 million in dividends last year, and the cargo handling firm is looking at a negative year in light of the global economic downturn.
Other entities with large shares held overseas include European companies such as British American Tobacco, which owns half of local cigarette distributor Carreras, and Diageo, which holds 73 per cent of the shares in Red Stripe.
Respectively those companies would have earned J$3 billion and J$620 million in dividends last year, although 80 per cent of BAT's earnings was from capital distribution.
Another $1.5 billion in dividends was paid out to companies in Barbados and Trinidad for their shares in Jamaica Money Market Brokers (JMMB), Pan Caribbean Financial Services and Sagicor Life of Jamaica.
Interestingly, 10 per cent of the JMMB shares are held by the Trinidadian Government, which took over the assets from CL Financial Group as part of a bailout plan.
C L Financial Group still holds the majority shares in Lascelles de Mercado, but the local manufacturer of spirits didn't pay out dividends last year.
The year before, Lascelles paid J$288 million in dividends.
http://www.jamaicaobserver.com/magaz...IDEND_TAX_.asp
Friday, April 24, 2009
Finance Minister Audley Shaw's plan to charge withholding tax on non-resident shareholders of Jamaican listed companies would likely earn the government J$3.4 billion or more should firms maintain last year's dividend policy.
What's more, Canadian billionaire Michael Lee Chin and the parent of Scotia Group Jamaica (SGJ) will feel the brunt of the tax.
Audley Shaw Last year, SGJ, which consistently pays out dividends - usually the same as the year before - forked out J$4 billion, of which J$3.1 billion went to the parent in Canada.
The tax to be applied is 33 1/3 per cent, which means that this year J$1 billion will go back to the Government.
National Commercial Bank, which has a similar dividend policy to SGJ, forked out J$2.8 billion in dividends. Lee Chin's share, which he owns through AIC, would have yielded him J$1.9 billion and would attract a tax of J$639 million.
His 47 per cent stake in Kingston Wharves would also be affected, although he only earned J$25 million in dividends last year, and the cargo handling firm is looking at a negative year in light of the global economic downturn.
Other entities with large shares held overseas include European companies such as British American Tobacco, which owns half of local cigarette distributor Carreras, and Diageo, which holds 73 per cent of the shares in Red Stripe.
Respectively those companies would have earned J$3 billion and J$620 million in dividends last year, although 80 per cent of BAT's earnings was from capital distribution.
Another $1.5 billion in dividends was paid out to companies in Barbados and Trinidad for their shares in Jamaica Money Market Brokers (JMMB), Pan Caribbean Financial Services and Sagicor Life of Jamaica.
Interestingly, 10 per cent of the JMMB shares are held by the Trinidadian Government, which took over the assets from CL Financial Group as part of a bailout plan.
C L Financial Group still holds the majority shares in Lascelles de Mercado, but the local manufacturer of spirits didn't pay out dividends last year.
The year before, Lascelles paid J$288 million in dividends.
http://www.jamaicaobserver.com/magaz...IDEND_TAX_.asp
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