Sunday, November 9, 2014

Study finds uneven tax rates among rich and poor in Jamaica


JAMAICA taxes the rich at one of the lowest rates in the world while taxes on the poor are among the highest, according to a new Personal Taxes Study by UHY, an international accountancy network.
It has led to calls to increase the tax threshold in order to reduce the tax burden on Jamaicans.
"The Jamaican Government should take bold steps to increase the tax-free threshold to US$10,000. This measure would have a positive effect on EMPLOYEES' productivity, and tax revenue loss can be recovered via a sales and consumption tax," stated Dawkins Brown, MANAGING partner of UHY Dawgen in Jamaica.
The study, released last week, found that individuals earning US$1.5 million (J$168 m) a year pay 29 per cent as INCOME tax in Jamaica compared with the global average of 40 per cent. That equates to US$1.06 million in take-home pay.
But the Jamaican scenario flips towards comparatively greater taxation for those who earn smaller salaries. The study found that individuals earning US$25,000 (J$2.8 million) a year pay income tax at 26 per cent in Jamaica while the global average drops to 17 per cent. Interestingly, the European average drops from among the highest in the world at 50 per cent for US$1.5 million earners down to 17 per cent for US$25,000 earners.
Brown explained that on the upside the relatively lower tax rate in Jamaica for high-income individuals could serve as a competitive business advantage.
"While not a lot of employees in Jamaica are earning US$1.5 million or approximately J$14 million per month, this is important to attract high-skilled professionals from abroad, who can train our local staff, resulting in 'effective knowledge transfer'," Brown said in an e-mailed response to Jamaica Observer queries.
Last week, the World Bank announced that Jamaica jumped from roughly 94 to 58 in the ranking of the 2015 Doing Business Report. It resulted in the island topping the region as the most competitive for doing business. Jamaica's improvement resulted from a series of business reforms Government fast-tracked in order to access financing from multilateral agencies, led by the International Monetary Fund (IMF).
"Lower tax rate is definitely a competitive business advantage. Multinationals who seek to expand internationally are motivated by competitive tax policy, both for personal taxes and corporation taxes. As Jamaica improves its ranking in the Doing Business Report, more companies will seek to explore possibilities of setting up subsidiaries here. Tax policy will be a key determinant in this decision," stated Brown.
The study found that some of the lowest rates were in Dubai, at zero personal INCOME tax, and Russia, at 13 per cent. It also indicated that rates were adjusted following the western financial crisis.
"UHY notes that while top-earning western European taxpayers are still losing by comparison with peers globally, several countries (Italy and the UK) have dramatically reduced or withdrawn top rate tax bands imposed following the financial crisis," stated the study.
For example, in 2014, a taxpayer earning US$1.5 million in the UK saved some US$63,600 in taxes compared with two years ago, following the abolition of the 50 per cent tax rate last year, the report said.
The USA also substantially reduced the amount of tax it took from top earners, lowering the tax take from an income of US$1.5 million to 42.5 per cent of earnings from 43.28 per cent. This saved high earners over US$10,600 a year.

Monday, November 3, 2014

Eastern Europe and emerging economies offer most generous tax regimes for higher earners | UHY Dawgen Chartered Accountants Blog

Western European economies* hit their highest earners with 25% more in tax than the global average,  amounting to just over US$152,406 extra in tax on an income of US$1.5million, according to a new study by UHY, the international accountancy network.
The research reveals that the global average take home pay on earnings of US$1.5million is US$897,970 with tax at 40%. Taxpayers in Western European economies with the same earnings however, are allowed to take home only an average of US$745,563, paying 50% of their income in tax.
UHY points out that the highest earning taxpayers in Western Europe also face a far bigger tax bill than peers in other developed nations. In Western Europe, taxpayers with a gross income of US$1.5million would keep an average of 50% of earnings, compared to an average of 57% in Canada, the USA, Japan, New Zealand and Australia.
At a slightly more modest income of US$250,000 the gap is even wider, with taxpayers in Western Europe allowed to take home only 56% of earnings, compared to 65% in other major developed economies.
A middle-income taxpayer earning US$50,000 in a Western European economy would receive close to the global average net income at that salary – US$35,935 in Western Europe compared to US$37,695 globally.  However, the 28% they would pay in tax compares unfavourably with the 23% they would pay in the USA.
UHY adds that Eastern European and emerging economies continue to offer the most generous tax regimes to higher earners.  In Dubai and Russia flat rate, or no, taxation means that all taxpayers take home 100% and 87% of their pay respectively, while taxpayers earning US$1.5million in Slovakia, the Czech Republic, Jamaica all keep more than 70% of pay.
UHY observes that some Eastern European economies may be gradually eroding this advantage as they increase the tax burden on top earners.  For instance those earning US$1.5m in the Czech Republic have seen the amount of tax they pay increase by US$183,409 since 2012, thanks to a ‘solidarity surcharge’, against a global average tax rise for this group of US$6,531.
Western countries move to reduce taxes for top earners
UHY notes that while top earning Western European taxpayers are still losing by comparison with peers globally, several countries (Italy and the UK) have dramatically reduced or withdrawn top rate tax bands imposed following the financial crisis.
For example, in 2014, a taxpayer earning US$1.5m in the UK was US$63,601 better off than two years ago, following the abolition of the 50p tax rate last year.
The USA also substantially reduced the amount of tax it took from top earners, lowering the tax take from an income of US$1.5 million to 42.57% of earnings from 43.28% – saving high earners US$10,656.
In contrast, a taxpayer earning US$1.5m in France would be US$44,646 worse off after tax than in 2012, after President Hollande introduced a new tax bracket of 45% for people earning more than €150,000. However, President Hollande’s plans to impose a 75% supertax on incomes of over EUR1 million were met with resistance and were instead replaced with a temporary additional tax to be paid by employers on salaries above EUR 1 million.
Ladislav Hornan, Chairman of UHY, comments: “The message that high taxes on top earners are uncompetitive has made some impact in Western Europe, and governments have taken steps to reduce the rates on top earners.”
“However, the gap between how heavily you are taxed in Western Europe compared to other developed economies remains striking, especially at the US$250,000 level.  That’s a typical income for a successful engineer, marketeer or head of IT.”
“As the global economy improves and new job opportunities open up, Western European governments need to be aware of the risk of a brain drain of skilled professionals.”
UHY studied tax data in 25 countries across its international network. The study captured the ‘take home pay’ for low, middle and high income workers, taking into account personal taxes and social security contributions. High earners were defined as workers earning US$1,500,000 per annum. The calculations are based on a single, unmarried taxpayer with no children.
Dawkins Brown, Managing Partner of UHY Dawgen in Jamaica, comments: “Jamaica is charging a higher rate of tax on income of US$25,000  compared to the USA. It deducts 26%, compared to  17.74% in the USA. The Jamaican Government should take  bold steps to increase the Tax Free Threshold to US$10,000. This measure would have a positive effect on employees’ productivity and Tax Revenue loss can be recovered via a Sales and Consumption Tax.”
*Western European economies in the study are; France, UK, Italy, Austria, Spain, Ireland, the Netherlands, Denmark and Belgium.
table 1

*Minus figures indicate a decrease in tax home pay.
**Denotes countries where the change in tax home pay in USD is a result of exchange rate fluctuations and not due to a change in tax.
table 2


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Wednesday, October 22, 2014

Open Source IP PBX System available in Jamaica | UHY Dawgen Chartered Accountants Blog

Open Source IP PBX System available in Jamaica

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UHY Dawgen Information Technology Department (Dawgen Tech) now offers Asterisk based Open Source Communication Solution including  Open source based IP PBX solution

Asterisk is a complete telephone solutions platform. *astTECS offers open source asterisk solutions , addressing a wide range of call center / contact center solutions & enterprises solutions including – IVR systems & solutions, open sourceVoIP PBX, call center dialer, voice dialer, voice logger & voice recorder, automatic call distribution or ACD application softwarepredictive dialer, hosted dialer, GSM card for asterisk, VoIP call recording, customized line call recording / monitoring / tracking.
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Brochures:
For more details on Asterisk Systems & Solutions Contact us Today :1987-9084007/Email dawgentech@dawgen.com
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Wednesday, October 15, 2014

Corporate recovery & insolvency | UHY Dawgen Chartered Accountants


Challenging economic times inevitably leads to greater risk of companies encountering financial difficulties. 
At times of often intense pressure for business leaders, UHY Dawgen is able to provide clients with the assurance of dealing with approachable experts with the commercial awareness, practical skills and understanding to help navigate the best course of action.
Experience of business recovery across a wide variety of industries and circumstances enables specialists to provide an early assessment of potential solutions to your problems, whether a sudden reduction in cash flow or an unpaid debt from a major customer.

INNOVATIVE SOLUTIONS TO DIFFICULT PROBLEMS

Winding up a business is very much regarded as a last resort and, wherever possible, member firms will look to provide advice on rescuing or restructuring a company to help it return to profitability. 
What can appear to be an intractable situation can often be resolved through a restructuring of bank and equity finance or rescheduling of debts. 
Partners in our local offices are able to respond swiftly to help a company in trouble, often buying valuable time and breathing space to work through a solution.
The breadth of knowledge across sectors and geographies means we are well-placed to identify opportunities for disposals where suitable to help reduce debts or provide working capital. Working in partnership with property experts and lawyers ensures maximum value is achieved from business assets.
In circumstances where companies are unable to continue within their existing form, advice is provided on the most suitable options available including administration, liquidation and Company Voluntary Arrangements (CVAs).
Corporate recovery specialists in UHY Dawgen act as receivers or administrators, often enabling the business to continue trading whilst new owners are found. 

ASSISTING CREDITORS

When clients are at risk from financial problems affecting a major customer, partner or supplier, specialist staff are able to provide practical advice on the range of options available to recover debts or protect assets. 
Where necessary, advice can be provided on instigating insolvency procedures and clients represented at creditors’ meetings.
The reach of the UHY global network enables us to assist in recovering debts in jurisdictions throughout the world.

OUR SERVICES INCLUDE:

  • Debt collection
  • Corporate turnaround
  • Asset protection or repossession
  • Developing or implementing good management practices
  • Refinancing
  • Valuations
  • Debt management
  • Insolvency planning
  • Personal liability protection.
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Forensic accounting & litigation support in Jamaica and the Caribbean



Forensic accounting & litigation support

In a complex business world, forensic accounting services play an increasingly important role.
When disputes arise or fraud is taking place, specialist forensic services can have a significant impact on the outcome for your business.
Experts from UHY Dawgen work closely with clients and legal advisers to investigate and provide an objective assessment of commercial and contractual disputes.

BRINGING CLARITY TO THE MOST COMPLEX OF CASES

Specialist staff have in-depth experience of business information and financial reporting systems, accounting and auditing standards and procedures, evidence gathering and investigative techniques, and litigation processes and procedures.
Representatives from UHY Dawgen frequently act as expert witnesses in fraud and other criminal cases.
Member firms from across the UHY network are able to work together on cross-border cases and have experience of international arbitration in many jurisdictions.
As well as being able to respond quickly when disputes arise, UHY Dawgen  take a proactive approach to help clients identify potential problems and take action to avoid them.

SERVICES PROVIDED INCLUDE: 

  • Commercial and contractual disputes
  • Individual and family disputes
  • Forensic and corporate fraud investigations
  • Regulatory investigations
  • International arbitration
  • Insurance claims presentation and loss management
  • Computer forensic and data analytics 
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Corporate Taxation services in Jamaica


In an increasingly complex tax environment, having a strategy in place is vital for even the most straightforward of businesses.
Taking advantage of opportunities to minimise tax liabilities can deliver significant financial benefits for your business.
In-depth knowledge and understanding of areas, such as treatment of capital allowances and utilising R&D credits, can ensure your business is able to invest for growth in the most tax-efficient way.   Advice on methods for deferring tax can also help prevent or deal with cash-flow issues. 
UHY Dawgen provide corporate tax services to clients ranging from major companies to sole traders.
Services cover all aspects of taxation, from preparation and submission of accounts through to tax planning for minimising liabilities on acquisitions and sales. 
Specialist tax investigation services are  provided to clients with experts from across the UHY network having experience of the most complex of cases.

INTERNATIONAL TAX PLANNING

Through UHY’s global network, clients benefit from expert knowledge of different tax regimes throughout the world.
UHY Dawgen work with our clients to ensure they are optimising the structure of their international operations to be as tax efficient as possible.
As well as ensuring compliance with local legislation, specialists offer informed guidance on possible future changes to taxation regimes to help with longer term planning.

UHY DAWGEN CAN ADVISE YOU ON:

  • Preparing and submitting accounts
  • Taking advantage of capital allowances
  • Buying or selling a business
  • Loss relief planning
  • Capital gains tax
  • Relief for expenditure on intangible assets
  • International tax planning
  • Mergers and acquisitions tax issues
  • VAT and customs planning
  • Tax planning for ex-pat executives
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Provision of Audit & assurancein Jamaica



Independent audit and assurance are not just about good governance but valuable tools for benchmarking and improving business performance.
The breadth of knowledge and experience across industries and sectors ensures our member firms provide audit and assurance services tailored to the unique needs of your business. 
As well as meeting internal reporting requirements and statutory obligations, a robust annual audit identifies both threats and opportunities to your business or organisation. Intelligent insight is provided and practical recommendations made. 
In addition to carrying out audit and assurance services for individual businesses and organisations, UHY Dawgen frequently conduct audits on behalf of parent companies, managing and co-ordinating the audit process across an entire corporate group.

MEETING REPORTING STANDARDS, WHEREVER YOU DO BUSINESS

For many clients, audit services provided are used to ensure a subsidiary company meets the reporting requirements of the parent company.
UHY Dawgen is well-placed to carry out multi-national audit work and we frequently work with affiliated and non-affiliated firms and advisors. 
They also have a thorough understanding of international regulations and legislation, and experience of complex reporting issues, including Sarbanes-Oxley and International Financial Reporting Standards (IFRS).
Even though they operate through an extensive global network, the size of our network usually avoids conflicts of interest.

OUR AUDIT AND ASSURANCE SERVICES INCLUDE: 

  • Statutory audit and review of annual financial statements
  • Internal review
  • Review of internal controls
  • Compilation of financial statements and other financial reports
  • Performance and value for money audits
  • Risk assessment and recommendations to management
  • Special purpose audits
  • Regulatory reports
  • IFRS reporting
  • Sarbanes-Oxley compliance
  • Grant audits
  • Specialist pension fund audits
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