A tax holiday on digital transformation assets
JAMAICA, as well as the Caribbean region, is going through a massive digital transformation. Previous articles shared how this is now a necessary shift; otherwise, we risk falling further behind the economic development curve. What is not helping us advance are the onerous taxes still levied on technology devices and accessories. These charges have not changed, even with the onset of a pandemic that has further widened the gaps in digital literacy, SME digitisation and other transformation programmes, which have exaggerated the need for affordable devices.
Ultimately, a tax transformation strategy would ideally support the effective navigation of digital transformation changes and allow for the proactive planning for and navigation of them across the public and private sectors. “Tax transformation is a form of digital transformation that integrates processes, people, technology, and data to understand tax liabilities and forecast how decisions will impact them.”
But we may not be prepared to take this on at this time.
As a potential quick win, we could explore the possibility of a tax holiday to support providing more affordable access to technology devices to satisfy the current needs and challenges of multiple stakeholders. The magazine Wired recently published an article describing
Jamaica as a tech desert, counter to the heavy marketing and promotions done in both the public and private sector on the viability of Jamaica as the technology hub of the Caribbean. And yes, this type of criticism and its valid arguments will continue to hurt us if something isn’t done to correct the challenges. The article raised valid points that affect the digitising of our education efforts. Their list included high taxes and customs fees on devices bought overseas and shipped in and those sold by local vendors, at often two or three times the price you would see on Amazon or in a US electronics store. If not immediately addressed, we will not be able to build scale around many transformation initiatives.
Similar to the Urban
Renewal (Tax Relief) Act, the Government could seek to undertake temporary tax relief provisions on the importation of devices and accessories for individuals and businesses that act as resellers of electronics.
Visit https:// taxsummaries.pwc.com/ jamaica/corporate/ tax-credits-and-incentives)
The question is, why hasn’t the Government put this in place to support our COVID-19 recovery tied to digital transformation? Are there any measures to address this, and if yes, where can we find them?
Join us at our upcoming Biztech 2021 conference to discuss this and other critical insights on digital transformation in our region.