A self-assessment system, patterned on the Canadian tax system, was introduced in 1968 when the British model was revamped and the 1968-51 Income Tax Act, Cap 73 and the Income Tax Regulations, 1969 took effect.
Under this system resident individuals and companies are required to calculate their taxable income, tax liability and prepay meals and pay the tax due at specified times.
Over time various amendments have been made to the 1968-51 act, which is still in effect. Some of these amendments were incentive based, designed to encourage improvements in the island’s infrastructure, to promote investment, to facilitate growth in the agricultural, manufacturing, hospitality, service and insurance sectors, and to enhance opportunities for increased exports and foreign currency earnings.
Examples of some of the incentives which were granted to individuals over time as deductions and allowances within specified limits are as follows:
- amounts spent on support of relatives
- property repairs, mortgage interest
- solar water heaters and water saving devices
- life insurance policies and registered retirement plans
- investments in private and public companies
- savings in credit unions and purchase of mutual funds