Open Letter To Dr. Nigel Clarke

Dear Dr Nigel Clarke

Thank you for taking the time to read this letter. I am writing to you because I believe you truly care about Jamaica, and you are trying to help our country. My purpose today is to raise a very important matter in relation to the current application of tax residence laws and how they are triggered. I strongly believe the present situation will cause long-term damage to the Jamaican economy. 

The current regulations are unfair, given the following statement about how these tax residence triggers are applied:  "They (or their spouses) have a place of abode available for their use in Jamaica, and they visit the island at any time during the tax year, no matter how short the stay." It is hard to understand a situation in which people who own a home in Jamaica are liable to be taxed for it even if they visit for only one day. How is this policy equitable?

This is a very damaging law that ultimately affects everyone, not only people with a vacation home here. I’m sure you are aware that many Jamaicans have had to leave our country to seek opportunities elsewhere because those same opportunities were not available here. Having achieved success, they naturally want to return home from time to time; therefore, they buy a house on the island to facilitate their return visits.

When they buy a house they are making an investment in Jamaica, not to mention the money they spend during their visits, which benefits the economy. Therefore, they are already making a significant contribution to the country, even if their visits are short. The longer they stay, the more they contribute to the tourist trade. 

I’m sure you are aware that the tourism industry brings in over 50 percent of our country's total foreign exchange earnings, and many tourists use the aforementioned holiday homes when they stay here. However, our tax laws now punish these people by demanding taxes from them as well, even though they will also have tax liabilities and must file tax returns in the country where they live and work. 

How many people will want to go through the effort to stay tax compliant in both places in this world of convenience? Ultimately, they will be forced to choose between Jamaica and their country of work and residence, and the winner will not be Jamaica. The result is a drain of money from the country and significant damage to the tourism industry here that compounds upon the current brain drain situation. Consequently, you won’t just lose their taxes; you will also lose all the money they spend when they are here. I believe this law to be very short-sighted and damaging to Jamaica in the long run.

In addition, the second tax trigger, which punishes people who visit over four consecutive years, is also counterproductive. We should, in fact, be encouraging repeat tourism rather than making it more difficult for people to visit. 

Thank you for reading my letter detailing why we need to remove these tax residence triggers for the good of our country. If you do repeal the tax trigger and the diaspora can purchase more vacation rentals, it will have a beneficial effect on our country’s economic wellbeing. We will also collect more tax revenue in the long term due to the additional economic activity. 

With these negative incentives in place, Jamaica becomes much less attractive to the diaspora. Jamaica failed to provide for many of its people years ago; we should now reward their success and welcome them home with open arms. 

I hope you will give this matter serious consideration. I would be happy to speak to you in greater detail about these issues.