by WADE GIBBONSBARBADOS is set to become a more attractive tax jurisdiction as it will now be easier for people to contribute to charitable organisations.The House of Assembly yesterday approved amendments to the Income Tax Act and the Charities Act, following debate led by Prime Minister David Thompson on the two bills, which were taken together.Thompson said the amendments would make Barbados a more attractive tax jurisdiction for non-domiciled people who wished to be resident here for tax purposes and as a result, would encourage more foreign exchange earnings. He added the amendments would also make it more appealing for people to contribute to charitable organisations especially those that were specifically declared exempt charities.Thompson said the Income Tax Act amendments would reduce the effective rate of income tax that those resident, but not domiciled here, would be required to pay on their foreign income.He added the amendments would also allow an individual who became domiciled here to claim the foreign currency earnings credit in respect of income derived from outside Barbados.Dividends derived by Barbadian resident companies, he said, including those licensed to operate in the international business sector, should be exempt from tax here on dividends derived from a substantial shareholding in an overseas company.Thompson said exemption from withholding tax with respect to dividends paid by a resident company to non-resident shareholders out of foreign source income earned by the company would be granted.He indicated the amendments would see both cash donations and property being allowed for tax purposes.He added small organisations should not be required to prepare and file legal documents with the Corporate Affairs and Intellectual Property Office in order to be a benevolent organisation. The Prime Minister explained that a letter from the appropriate ministry that the organisation was an approved organisation should be sufficient. He noted that covenant rules should be abolished and in their place, official donation receipts be allowed.Large one-off donations to specially scheduled charities with a major public purpose such as the Queen Elizabeth Hospital project or the constituency councils project, he said, should be written off in one year since such donations would reduce charities’ dependence on Government.Opposition Member of Parliament Dr William Duguid questioned donations to the constituency councils, noting they could be politically motivated. He asked what was in the legislation to stop an organisation from inappropriately donating $15 million to a political party and then benefit from unfair political patronage. wadegibbons@nationnews.com
