Six (6) Reasons why you'll need a TCC in Jamaica

By: Kmar Henry

CEO │ BIZcare Consultation & Accounting Firm

Edited by: Sheryl Bailey

Accounting Clerk ǀ BIZcare Consultation & Accounting Firm

Since 2015, the Government has made various changes in relation to customs, bank, road licensing etc., that will now require the submission of a Tax Compliance Certificate (TCC). It is not hard to establish that these changes will mostly apprehend and be made accountable to those individuals who fall within the category of Small Business Owners or Self-Employed as they are the fore runners that use this important document. This is largely due to the fact that the government has implemented other means and ways to increase the collection of taxes and contributions, thus why it is extremely important for all individuals to be widely aware of how these changes may affect you in acquiring these required documents or services if needed.

What's a Tax Compliance Certificate?

A Tax Compliance Certificate commonly known as TCC, is a document which proves that an individual or business has filed and paid all taxes liable. These taxes range from Income Tax, Contributions (NHT & NIS), GCT, Payroll Deductions etc. It is important to also note that all returns must be filed as well, yes even your trade license will come into play, monthly SO1s (Payroll deductions) and GCT’s if operating a business making over the GCT Threshold of $10 million.

What are these Six (6) Reasons?

We will start from inception; from the opening of a business-to self-employed or the employed worker who may want to operate a public passenger vehicle. So, hence here goes:

1. Opening a Business Account: This one always hits after a person has just registered and now proceed towards getting a Bank Account opened under the business name to conduct all business transactions. If you're operating as a sole trader/trade as, a TCC will be required to complete this transaction. However, measures have been implemented by the government that allows 'Limited Companies' to retrieve a TCC upon registration, which will be granted as a multi-purpose TCC for (3) months to conduct transaction like these. Another good reason to register as company and don't worry; remember that yearly taxes such as Minimum Business Tax (MBT) and Asset Tax have been abolished. Thus, if you know that you have outstanding amounts owed to the Government as a Self-Employed individual save yourself the hassle and register as a company. You should though; ensure that you settle your balances at the earliest time after. Also, an important fact to note is that you can speak with a compliance officer about getting yourself/business on a payment plan to cover these balances.

2. To Clear (Goods/Products/Equipment) at Customs: This one will surely have you joining the waiting list to clear any good, product, equipment or motor vehicle if all taxes or contributions have not been settled or cleared. Without the proof, provision and submission of a TCC, self-employed or small businesses (Both sole traders & company limited) will not be able to retrieve their supplies upon arrival at the customs. A very important aspect to keep up to date with especially if you're operating a Car Mart. Also bear in mind that a bill of lading will be required to acquire the TCC at the tax office once clearing goods.

3. Loan Access: Whilst this may not be applicable in all situations or for all persons, if you are seeking a business loan or as a self-employed individual you may be required to submit a TCC as part of the application process pending on the nature or requirement of the loan. Also, the filing of your returns as small business owners and self-employed individuals may come into retrospect if the bank is unable to prove your revenue or income based on the passage or pattern of funds throughout your account, again filing of returns proves its fluidity.

4. Firearm License: Yes, the TCC provision has now stretched across to persons who wish to attain or renew a firearm. Individuals are now required to provide a TCC as part of the necessities needed. This TCC will be in the name of the individual trying to acquire the license and not in your business name (if business).

5. Road License for PPV: Not many persons have digested this one easily, I can assure you that even up to this point that not many persons are aware of this implication or requirement that has been implemented by the Jamaican Government. To gain a PPV road license for various routes as bus operators, persons are now enacted to supply a TCC. Thus, making it imperative for all bus operators of sort to file their annual tax return.

6. To land Contracts: Probably you have heard of the importance of contractors to have their documents updated and NCC approved in order to be in good hands with the National Parish Council and Road & Works so that when a bid is won they can safely land any contract as such. However, the importance of a TCC is now just as important.

It is now safe to say; that the TCC document has pushed its way towards the forefront of conducting leading channels through which the Government can now ensure that Tax Payers who fall within the category of Self-Employed and Small Business owners are on top of their game within the tax field. Hence, most have raised their alertness towards the importance of staying tax compliant, a factor which has now been placed within the hands of all tax payers.

Now that you know what a Tax Compliance Certificate (TCC) is and the many reasons you need to acquire one, let’s get to the intricacies involved in actually obtaining one:

The TCC is granted at the Tax Office, however it is not solely dependent on paying just the ED-Tax (which is Tax Office’s portion of the taxes to be paid). Because a clearance letter is required from both NHT & NIS all taxes need to be paid up. Thus, the Tax Office will need this confirmation from both NHT & NIS (clearance letters) to state such.

Another key factor to note, if you have more than one business type (Sole Trader, Partnership or Company Limited) registered in the same name, this said TCC will only be valid for the business type it was acquired for use.

What do you need?

You will need to provide the receipts of taxes paid up (in case it is not being shown on their system). Your TRN number is also needed for sole trader/trade as and for a registered business the Business Registration. Also, note that paying both your personal taxes and the business taxes/contributions (Payroll) are required.

TCC periods which are granted are:

(1) One (1) Month: This is used for a specific purpose which is stated on the application form and cannot be used for another purpose. E.g. If the purpose stated on the application form is to open a bank account, that said TCC cannot be used to clear goods.

(2) Three (3) Months: This is granted as Multi-Purpose, that is if you are registered for GCT (please see article on GCT). This, on the other hand can be used for any purpose as long as the TCC period is valid.

N.B Do remember for registered businesses, the Annual Filing must be current. Also, if you acquire a Clearance letter from either NHT or NIS before paying the taxes and you opt not to, you have not escaped paying these taxes, but rather pushed forward the inevitable; since the next time you need to acquire a TCC you will need to pay more money as there will be now added interest and penalties on the previous balance.

If you need more information or clarification, feel free to visit our Facebook Page (DM) or call or whatsApp us at 1 (876) 545-6928. Do remember at BIZcare "Your Business is our Priority". We offer the services of: