As you accept the invi-tation extended by Finance Minister Audley Shaw to become tax compliant, here are several steps which self-employed individuals and new businesses will need to take.

The Jamaican Government is already warning self-employed persons and professionals to send in their returns by October 31, when the amnesty loophole will close.

"Pay up to the last 12 months and no questions will be asked," said Prime Minister Bruce Golding on his weekly radio show.

Those who do not act within the deadline will be targeted for audits going back seven years.

You are expected to register with several government agencies before you take your documents for final registration with the Inland Revenue Department at any of its collectorates nationwide.

Agencies

Before paying over any money to Inland Revenue, you will need to be registered with the following agencies:

The Companies Office of Jamaica for trade certification.

The National Insurance Scheme office.

The Taxpayer Registration Centre.

The National Housing Trust (NHT).

Inland Revenue for registration as a general-consumption tax (GCT) collector.

The Kingston and St Andrew Corporation or relevant parish council where you make your trade-licence payment.

You will be expected to pay 25 per cent of income from profit above the income-tax threshold, which is now at $18,352 per month but set to rise in June 2009 and January 2010.

You must also pay your contributions to NIS of 2.5 per cent but not exceeding $104,167 monthly; NHT of 3.0 per cent; GCT of 16.5 per cent; and education tax of 2.0 per cent.

GCT must be paid monthly and income tax quarterly, with final returns made on March 15 of each year.

Self-employed persons, like any other business person, are entitled to claim any expense which relates to generating earnings from economic activity.

According to Michael Dixon of the Taxpayer Assessment and Audit Department (TAAD), if one operates from home, rental or mortgage and utility payments can be claimed against profit.

"Take out the portion that relates to the business," Dixon advises.

"If you use half of your home for business, the amount paid for utilities would be split in the same way. The same applies to mortgage or rent payments."

Income-tax rate for companies

The income-tax rate for companies is 33.3 per cent of your net profit less any allowances. For the self-employed, the rate is 25 per cent.

"Do a projection of your net profit for the year and pay this quarterly in March, June and December. A final return is due the 15th of March and this should be based on actual income," Dixon said.

"If you underpaid in your quarterly submissions, you must pay the difference. If you overpaid, request a refund and you will receive that in a few months."

While it is the TAAD that does verifications and refunds claims, all income-tax filings and payments are to be made at the Inland Revenue Department at its approximately 30 tax offices across Jamaica.

You cannot make claims against money spent on your dependents as these allowances do not apply in Jamaica, having been phased out in 1985.

Keep all receipts and invoices for income and expenses for six years in case of an audit by the tax department.

avia.ustanny@gleanerjm.com