JMMB Seminar Gives the Ins & Outs of Filing Taxes for SMEs

During a recent online seminar, hosted by the JMMB Small & Medium-Sized Enterprises (SME) Resource Centre, taxpayer education officer at the Tax Administration of Jamaica (TAJ), Antoinette Anderson, outlined that the key to the effective filing of one’s taxes is efficient record-keeping. Noting, “Your record keeping does not have to be a robust and hi-tech system, it simply needs to keep an accurate record of your income and your expenses and can be as simple as a receipt book or keeping a copy of all your purchases (etc.).”   

She further pointed out that good record-keeping of the relevant documents,  such as: invoices, banking transactions, receipts and using good accounting principles to manage expenditure and income, can assist entrepreneurs to more accurately determine the amount of tax payable to the relevant authorities, in addition to assisting with the overall monitoring of business operations. She also reminded SMEs that it is mandatory by law to keep business records for a minimum of 6 years.  This clear financial management is essential, against the background of the self-reporting approach used by the tax administration in Jamaica, whereby the burden is placed on the business owner to pay the relevant taxes, based on the business’ profit, where applicable.

The taxpayer educator underscored that business owners have both a right and responsibility to know the facts in regards to filing and reporting of taxes. She, therefore, encouraged SMEs to reach out to the TAJ, for the necessary support and the various accounting experts, in the preparation of financial statements and subsequent filing. As the government looks to change the date when income tax returns are due from March 15 to April, as of 2022, the ins and outs of filing taxes remains critical for SMEs. 

In encouraging entrepreneurs to be tax compliant and keep good records, Anderson outlined that the process of filing the necessary taxes offers spill-off benefits, including greater access to financing (as financial statements would be current) and other technical support, as their business grows.
All companies, organizations, self-employed persons, as well as employed persons with additional sources of income are required to file all returns online via TAJ’s online portal at www.jamaicatax.gov.jm. This is in keeping with an increased focus on virtual support for micro, small and medium enterprises offered by the TAJ’s annual Special Taxpayer Assistance Programme (STAP), to assist them in meeting their online filing obligations. The online filing will also allow businesses to efficiently make payment, while limiting the need for face-to-face interaction, especially in light of the COVID-19 spikes recently. 

The taxpayer educator, in detailing the types of taxes applicable to business owners, shared that: National Insurance Scheme, National Housing Trust and Education tax and income, if above the threshold of approximately J$1.5M, are applicable for self-employed individuals or sole trader operators. She also reminded business owners that, “When you are a sole trader, you are an entity in itself, so every source of income must be reported on your SO4 (form)…so you have to report every gig you have (and the corresponding income).” Where a company has employees whose terms of employment are based on contract of service or full-time employment, the business owner is required to pay over these relevant taxes (NIS, NHT and Education taxes) and the company’s matching contribution to the TAJ; in addition to its profit tax. In addition, general consumption tax (GCT) is typically applicable to companies with earnings above J$10 million for the year, with the exception of companies that by the nature of their business operations make them exempt. Companies can also apply to the tax administration to receive their tax compliance certificate (TCC) if they pay GCT. 

JMMB Banks Seeks to Add Value to SMEs with Online Seminars 
The JMMB Bank-hosted seminar is in line with the company’s financial inclusion and integrated financial partnership approach.   As part of its strategy, the JMMB Group intends to add value to its small business clients and the wider sector through the provision of the financial partnership, resources, innovative financial solutions and a network, throughout these businesses’ life cycles; thereby providing necessary support for the growth in the sector, and filling the gaps that currently exist in the financial sector. Shani Duncan Falconer, senior corporate manager, JMMB Group SME Resource Centre shared, “These monthly public seminars are designed to encourage SMEs to be more intentional about their business success; take actionable steps; identify best practices and resources; and create and/or revise plans, so that they can put the necessary infrastructure, policies, systems and expertise in place, for their sustainability and growth.”  SMEs interested in participating in the seminar series can visit JMMB Group’s social media pages for details.

The online seminars are timely and relevant, as Jamaica has seen an increase in the number of businesses being registered over the last 2 years. According to the Companies Office of Jamaica, entrepreneurs and investors in 2020 registered 12,809 business names and 3,935 companies. This reflects an increase of 12% for business names and 3% for companies over the previous year, 2019; which saw a record increase of a 100% uptick in the number of companies being registered.