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by Venesha Johnson | Associate Writer
Let’s talk taxes, but more specifically, tax returns. I know it is such a big deal in America, but here in Jamaica, this is not a discussion often had. As a matter of fact, many of us are completely oblivious to the fact that we can actually file for tax returns. Well, today I am here to shed some light on this for you.
Whenever I get my paycheck and see all the tax deductions, my heart weeps (a lot), and if there is a way for me to recuperate some of that money, I am certainly going to try. So, I will share with you what I have found a little later. Before we look into what we can file returns for, we must understand the deductions and tax threshold.
Alright, let's start with the basics. Payroll contributions are the deductions made from your salary and serve various purposes. It's like bits and pieces of your paycheck going into different jars for specific purposes—like budgeting but for the whole country. Your employer deducts the agreed-upon percentages from your salary and chips in their part as well.
In Jamaica, we have 4 main contributions and each has a different percentage and threshold.
This one's like a safety net. NIS contributions fund benefits like pensions, disability benefits, and maternity grants. NIS contributions are at a rate of 3% for the employees and are matched by an additional 3% from your employer.
Consider this your housing fund. Contributions go towards homeownership benefits and financing housing development projects. Your NHT contribution is a total of 5%; 3% is to be paid by your employer, and 2% should be deducted from your salary.
A small percentage of your earnings goes towards supporting education. This is a big deal since we have free education up to the secondary level. Education Tax is charged at a total of 5.75%, 3.5% is paid by the employer and 2.25% is paid by the employee.
Regardless of where their money is earned, Jamaican citizens are subject to taxation on all their income. Even if an individual is not a resident—that is, if they are not domiciled in Jamaica—income tax is levied on any income received there. Individuals who earn between J$1.5M and J$6M (inclusive) are subject to a 25% income tax rate; those who earn more than J$6M are subject to a 30% rate. Individuals who earn less than J$1.5 million are exempt from income taxes.
Now, on to why you are really here… filing for your tax return. You can primarily file for two tax returns in Jamaica, NHT and Income Tax.
In the eighth year following the date of contribution, contributors are eligible to receive a "Regular" Contributions Refund. If you contributed to the NHT in 2015, for instance, you are eligible to request in 2023 for a return of that amount as well as any past contributions you made that you have not yet received a refund for.
To apply, visit the official NHT website at nht.gov.jm and complete the online application form. Make sure you have your NIS, TRN Card, and valid ID handy. There is even an app, that makes the entire process, quick and easy. All you will need to do is verify that the information you are seeing is valid, such as employer and years of employment are accurate, submit your preferred payment method and hit apply. Your refund is usually made available within 2 to 3 weeks.
Now, this is the part that leaves many of us confused and most don’t even bother to attempt filing for income tax. Most companies take care of the filing of income tax for their employees and also the filing of income tax returns.
In most cases, you will not be paying income tax unless you are above the income tax threshold of 1.5 million dollars. Of course, situations may vary.
It is important to note that before filing for your income tax, you will be required to declare any income you have earned throughout the year. Your overall income tax contribution will be determined by your total earnings. Income tax returns are due by March 15th each year, for the immediately preceding year.
As mandated by law, all businesses, organizations, independent contractors, and employees with additional sources of income must file their returns electronically. The Administration's online tax portal, www.jamaicatax.gov.jm, must be used for filing. Users can also get easy-to-follow instructions on how to file online by visiting the 'How To' section of www.jamaicatax.gov.jm or by getting in touch with their offices.
We are a bit more relaxed and blasé about taxes here in Jamaica, more of a “ it is what it is attitude”. However, these are a few options for getting back some of that money.
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