Tax rules may hamper pension reform
published: Wednesday April 26, 2006
Brian J. Denning, Contributor
Denning
AS DR. Omar Davies, Minister of Finance and Planning, prepares to deliver his 2006/07 Budget tomorrow, it is hoped that the minister will amend certain tax rules which may otherwise have a negative impact on the nation's pension reform programme.
The Government's 2001 White Paper on Pension Reform stated that the reform of Jamaica's pensions regime has two key features:
The enhancement of Jamaica's social security system - National Insurance Scheme - so that more meaningful benefits can be provided to eligible contributors and their beneficiaries; and
The regulation of cccupational pension schemes and approved retirement schemes within an effective legal framework.
A primary objective of this reform programme is to ensure that proper arrangements are made by, and for, persons during their working lives, so that they can receive an adequate pension upon retirement.
This includes the establishment of an appropriate framework for self-employed persons and persons in non-pensionable employment to make sufficient provision for their retirement.
The Pensions (Superannuation Funds and Retirement Schemes) Act, 2004 (which came into force on March 1, 2005) and accompanying regulations provide the legal framework within which this reform shall take place.
To date, however, our taxation laws have not been amended in order to ensure that our tax rules complement and support the objectives of the pension reform.
For More Perspectives on these Issues see The Jamaica Gleaner
