Farmers

 

Persons involved in farming of any sort, can get information that will help them understand how tax laws apply to them.

Farmers with income earned exclusively from carrying out prescribed agricultural activities can get relief of income tax under the Income Tax Act.
 

Prescribed agricultural activities may include:

    • Growing of food crops
    • Seed growing
    • Growing of trees for the purpose of producing timber
    • Growing of tobacco
    • Fishing and fish farming
    • Breeding of beef and dairy cattle, pigs, sheep, horses and goatsHorticulture
    • Production of fertile eggs for hatching
    • Production of table eggs
    • Agriculture (bee farming)

 

 The procedure for getting Income Tax relief is as follows:

    • Obtain an application form from the Rural Agricultural Development Authority (RADA) parish office.
    • Complete an application form in duplicate, stating amongst other things name and address of the farmer, Taxpayer Registration Number (TRN), the location of the farm, the land tenure, number of acres, and the agricultural activities being carried out and submit the form to the RADA office for further processing.
       
    • Based on the application, officers from RADA then visit the farm and carry out an assessment to ensure that it is a bona fide operation and that the farmer is involved in a prescribed agricultural activity.  This information is forwarded to the Ministry of Agriculture for further processing.
       
    • The Ministry of Agriculture then forwards its recommendations to the Legal Support Division of Tax Administration Jamaica (TAJ). The recommendation is assessed and the information is forwarded to the Operations Division of TAJ to investigate and verify if tax returns are filed up to date.  The findings of the Operations Division are then reported to the Legal Division.
       
    • If the application meets all the qualifications, the TAJ prepares the relevant Order for the approval of the Minister of Finance.  Once the Minister has approved the Order, it is published in the Gazette. 
       
    • Once the Order has been published in the Gazette, the farmer is legally designated an Approved Farmer.  This Order is forwarded to all relevant parties – Ministry of Agriculture (who forwards it to the applicant) and Tax Administration Jamaica – informing them of the farmer’s exempt status. 
       

The relief is normally for a period of ten years in the first instance, but may be extended another five years by the Minister.  Criteria taken into account in granting any further relief are the potential foreign exchange earnings/ savings, and the viability and profitability of the enterprise.

 

It should be noted that Approved Farmers are required to keep separate books of accounts relating to their prescribed agricultural activities and MUST still file returns by March 15 each year.  In the event that any of the terms and conditions imposed is breached, the Minister may revoke the Order, but not before the approved farmer has been given the opportunity to explain the circumstances of his failure to comply with those terms and conditions.
 

The approved farmer may set off any loss incurred in connection with a prescribed activity against profits or gains arising from any other trade, business, profession, employment or vocation carried on by him.

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