Moving Towards Electronic Filing The Department of Inland Revenue will be entering into a new and exciting era of tax administration. Electronic filing and other electronic services will be made available to taxpayers from calendar year 2009. Tax- payers will be able to file Individual, Reverse Tax Credit, Corporation and Divided Income Returns electronically from that year. Services such as electronic filing of objections, applications for tax clearances will also be facilitated. Employers and other third party providers will now be required to send information such as Return of Remuneration directly to the department in an electronic format either through the internet or on CD, DVD etc. It is there- fore necessary that employers and other third party providers begin the process of putting in place systems to gather information vital to the process of electronic filing. With this in mind the Department made several presentations to third party providers between 19th and 23rd November, 2007 at the Grand Salle of the Central Bank, disclosing broad outlines of the Department's plans. Here are features of that presentation. Investment in shares with Co-operative Societies Pursuant to the recent amendment to the Income Tax Act regarding deposits of saving invested in shares with co-operative societies, the Department has provided these guidelines that deal with certain situations which may arise as a consequence of the amending legislation quoted below:- Section 36B With effect from Income Year 2007 in calculating the taxable income for an income year of an individual there shall be deducted from the assessable income of that individual, in respect of an investment in shares during that income year with co-operative societies registered under the Co-operative Societies Act, an amount not exceeding $10,000 for each year on the certificate to that effect of an officer within the meaning of Section 2 of the Co-operative Societies Act. Where an individual referred to in subsection (1) with-draws any shares within 5 years of the year in which they were invested from a co-operative society in respect of which a deduction was made, the amount so withdrawn shall be brought back into charge to tax in the year in which the withdrawal was made. In this section, shares means deposits in co-operative societies classified as shares. To give practical expression to the above section, the Department advises as follows:- Co-operative Societies must first ascertain from each member whether the member is desirous of making a claim for a tax deduction for amounts of savings invested in shares in 2007 in accordance with the new legislation. Only those members who qualify and who have indicated their intention to make a claim should be provided with a Certificate of Shares for tax purposes. The member may be reminded that any savings invested in shares for which a claim was made will be subject to the with-drawal restriction as outlined in subsection (2) of Section 36B above. Without prejudice, qualifying first time claimers who are entitled to claim the initial period of savings January, 2006 to December, 2007 - may claim a tax deduction for that period in accordance with the new legislation up to a maximum of $10 000. Co-operative Societies may initiate and implement any system that would enable them to effectively administer the new regime of share holdings and share withdrawals in accordance with the new provisions of the Act. It is not necessary to obtain prior approval from the Department to implement any such system. However, it is advisable that Co-operative Societies notify the Department when a system has been instituted. S. WALCOTT-DENNY (Mrs.) Commissioner of Inland Revenue February 12, 2008 NOTICE: TO TAXPAYERS WISHING TO CLAIM INVESTMENT IN SHARES WITH CO-OPERATIVE SOCIETIES Pursuant to the recent amendment to the Income Tax Act regarding deposits of saving invested in shares with co-operative societies, the Department advises in respect of Income Year 2007 the following:- You may apply to your credit union for a ‘Certificate of Shares’. This should only be done if you intend to claim a tax deduction for the amount invested in shares. Your claim is limited to $10,000, which is the maximum allowable deduction. The amount invested should be held for 5 years. However if the amount or any part thereof is withdrawn within the five year period it will be taxed in the year in which it is withdrawn. The amount withdrawn will be subject to a 20% with-holding tax at the time of withdrawal. Please be guided accordingly. S. WALCOTT-DENNY (Mrs.) Commissioner of Inland Revenue 2007 Amendments to the Income Tax Act. Parliament recently passed the Income Tax (Amendment) Act, 2007 which contained at least four major provisions that could affect a sizable number of taxpayers. (1) Rent Deduction As of income year 2006 individual taxpayers may claim as a deduction an amount equal to 20% of rents paid in respect of a residential property or $3 000 which ever is the lesser. This claim must however be supported by a certificate of the owner of the property that verifies the tenancy and the amount of rent paid. (2) Home Energy Audit Individuals can now claim for the first time the cost of a home energy audit conducted by an authorised auditor and any conservation systems or materials recommended in that audit not exceeding $2 000 within the limit of $10 000 granted for home allowance. (3) Losses from Rental of Residential Property With effect from income year 2006, income arisen from the Rental of Residential property is to be taxed separately at the rate of 15%. Losses incurred from Rental income can only be set off against this source of income and no other, and may be carried forward for nine years if unrelieved. (4) Tax Free Interest on �Education Savings Plan Account� Effective income year 2006, interest received by or credited to a special savings account designated by the account holder as an �Education Savings Plan Account� for the specific purpose to offset the cost of a student acquiring tertiary education, will be tax exempt. However, this �Educational Savings Plan Account� must be a single account, the balance of which does not exceed $100 000 and the holder of which satisfies the Commissioner that the account is used specifically to offset the cost of providing tertiary education for no more than 4 students. Special Instructions for your 2007 Individual Tax Return In completing your 2007 Tax Return we advise that you give due consideration to the following: 1) Use the unlabelled return as your work copy contained in your Tax Return Package. 2) Then complete the form with the preprinted label, sign it and submit to the Inland Revenue Department in the pre addressed envelope enclosed in the package. 3) Your National Registration Number is very important in facilitating the processing of your return. Please be sure to include this on the return. 4) If your name or address on the label is incorrect, please use the space provided below the label to make any necessary corrections. 5) If your National Registration Number is incorrect, please use the space provided at the right of the label to enter the correct number. 6) Persons who originally did not have a National Registration Number and were assigned a temporary number in the 900 000 series, but who now have the national Registration Number, must now enter this in the space provided at the right of the label. 7) If you are due a tax refund we strongly urge you to opt for the Direct Deposit method of payment. This you can do by indicating in the space provided on the return, the name and address of your Bank or Credit Union and the number of the account to which you wish to have your refund deposited. The Direct Deposit method of payment is both speedier and safer. Go for it! 2007 Individual Tax Calculations Elsewhere on this site under the above caption you will be able to calculate your own Tax Refund or tax liability as the case may be. Just enter all the relevant information in the appropriate spaces` and you will have the results in no time. Why not try it? Good Luck!
The Direct Deposit of Income Tax Refunds
With effect from the year 2004, the Department of Inland Revenue instituted a system whereby taxpayers could opt to have their income tax refunds for the income year 2003 and subsequent income years, credited to a designated account at a bank or credit union.

This new process has proven to be beneficial both to the Revenue and taxpayers who have opted to use it. It has enabled the Department to process tax refunds more speedily and it has saved the taxpayer valuable encashment time, as refunds could then also be accessed through Automatic Teller Machine (ATM) facility.

Persons opting for the Direct Deposit Facility are required to indicate this each time on the actual Tax Return being filed. They are also required to state the name of the Bank or the select Credit Union and provide the number of the account to which the Tax Refund is to be deposited.

The Department urges the public to make full use of this facility which is a speedier and safer process for issuing tax refunds.

The public's co-operation is appreciated.

NOTICE TO EMPLOYERS
Consequent to the recent amendments to Sec. 38B and Sec. 42 of the Income Tax Act, CAP 73, the following should be observed:
For the Income Year 2004
All Resident Individuals whose total assessable income is $17,500 per year or less are not liable to tax. Tax should not be deducted from persons whose salaries and wages are:
1. $1,459.00 per month or less
2. $ 337.00 per week or less
3. $ 48.00 per day or less

Rates of Tax
Rates of Tax	Taxable Income
$24,200 or less	20%
Over $24,200	40%

Pensioners
Individuals 60 years of age or over and in receipt of a pension may claim a personal allowance of $30,000.
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For the Income Year 2005
All Resident Individuals whose total assessable income is $20,000 per year or less are not liable to tax. Tax should not be deducted from persons whose salaries and wages are:
1. $1,667.00 per month or less
2. $ 385.00 per week or less
3. $ 55.00 per day or less

Rates of Tax
Rates of Tax	Taxable Income
$24,200 or less	20%
Over $24,200	37.5%

Pensioners
Individuals 60 years of age or over and in receipt of a pension may claim a personal allowance of $30,000.
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For the Income Year 2006
All Resident Individuals whose total assessable income is $22,500 per year or less are not liable to tax. Tax should not be deducted from persons whose salaries and wages are:
1. $1,875.00 per month or less
2. $ 433.00 per week or less
3. $ 62.00 per day or less

Rates of Tax
Rates of Tax	Taxable Income
$24,200 or less	20%
Over $24,200	35%

Pensioners
Individuals 60 years of age or over and in receipt of a pension may claim a personal allowance of $30,000.
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For the Income Year 2007
All Resident Individuals whose total assessable income is $25,000 per year or less are not liable to tax. Tax should not be deducted from persons whose salaries and wages are:
1. $2,083.00 per month or less
2. $ 481.00 per week or less
3. $ 68.00 per day or less

Rates of Tax
Rates of Tax	Taxable Income
$24,200 or less	20%
Over $24,200	35%

Pensioners
Individuals 60 years of age or over and in receipt of a pension may claim a personal allowance of $40,000.

Employers are therefore reminded that the necessary procedures should be put in place to ensure that the correct amount of tax (Pay as You Earn - P.A.Y.E.) is withheld at source from their employees and paid into the Department.