KINGSTON, Jamaica, CMC—The Home of Representatives has handed the Revenue Tax (Modification) Act, 2024, which seeks to implement a regime offering revenue tax credit score to people who purchase and set up a photo voltaic photovoltaic system at their major place of residence.
This stems from an initiative Finance Minister Dr Nigel Clarke introduced throughout his 2023/24 Price range presentation.
“This Invoice seeks to realize this by setting out the suitable authorized framework that will enable people to profit from this revenue tax credit score.
This measure varieties a part of a much wider purpose of lowering our dependence on fossil fuels and considerably growing the share of renewable vitality in our native vitality combine,” Clarke informed the Home earlier this week.
He mentioned Jamaica has set a goal of utilizing 50 p.c renewable vitality within the electrical energy technology sector by 2030 and that using appropriately focused fiscal measures is important to attaining this outcome.
“Additionally, you will recall that in my funds presentation earlier this yr, as part of the 2024/25 Price range, I indicated that the Authorities will even be lowering the company revenue tax charge for impartial energy producers producing 75 p.c or extra of their vitality from renewable sources, from 33 1/3 p.c to 25 p.c,” Clarke mentioned.
“The target of this charge discount is to advertise progress throughout the renewable vitality sector whereas offering a extra favorable tax setting and extra of an incentive for larger-scale funding in renewable vitality applied sciences, corresponding to wind and photo voltaic,” he added.
Clarke mentioned the main parts utilized within the set up of a photo voltaic photovoltaic system, such because the photo voltaic photovoltaic panels, photo voltaic inverters, and photo voltaic batteries, together with lithium-ion batteries, are additionally exempt from the cost of Normal Consumption Tax (GCT).
“These fiscal measures are proof of the Authorities’s dedication to realize 50 p.c renewables use by 2030. The Authorities will proceed to discover fiscal and in any other case measures to make sure this goal is met. The Invoice earlier than us units out the standards to allow people who’ve put in a photo voltaic photovoltaic system at their major residence to profit from the revenue tax credit score,” he mentioned.
As well as, the Invoice makes provisions for, amongst different issues, an revenue tax credit score of 30 p.c of the acquisition and set up value of the photo voltaic photovoltaic system for the taxpayer’s major residence, as much as a most value of J$4 million.
“Because of this the utmost credit score a person can declare is $1.2 million. This measure shall apply to photo voltaic photovoltaic programs acquired and put in on or after January 1, 2023 [that is] for the yr of evaluation 2023. The worth of the revenue tax credit score will probably be utilized to the acquisition set up value of the photo voltaic photovoltaic system and will probably be claimable within the yr the system is put in,” he said.
“The taxpayer will use the revenue tax credit score to offset their whole revenue tax legal responsibility equal to the whole worth of the credit score acquired. The credit score can be non-refundable, i.e., the credit score’s whole worth exceeds the taxpayer’s legal responsibility; the taxpayer wouldn’t obtain a money refund. A carry-forward provision is included to permit the person to use the unused portion of the credit score to future tax years,” the Finance Minister mentioned.
Clarke mentioned the credit score utilized can be restricted to a most of fifty p.c of the revenue tax payable by the taxpayer within the assessed yr, with the remaining quantity being carried ahead and utilized to the longer term tax yr.
To assert the credit score, the taxpayer should present proof, corresponding to invoices and impartial verification, that the photo voltaic photovoltaic system is put in and producing electrical energy.
“The Invoice [also] seeks to amend the revenue tax prescribed kind order 2015 to prescribe new taxpayer return varieties to facilitate the tax credit score within the related varieties,” Clarke mentioned.
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