Industrial Incentives (Factory Construction) Act

Link to law: http://www.moj.gov.jm/laws/industrial-incentives-factory-construction-act
Published: 1961-02-21

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INDUSTRL4L INCEhTNES (FACTORY CONSTRUCTION)

THE INDUSTRIAL INCENTIVES (FACTORY
CONSTRUCTION) ACT

ARRANGEMENT OF SECTIONS

PART I . General

1. Shorttitle.
2. Interpretation.
3. Apprwed builder may construct factory.
4. Power ofMinister to gmi or revoke licences.
5. Transfer of rights and obligations on sale or lease of factory
6 G m t of licences to Jamaica Promotions Corporation.
7. Applications for licence

PART 11. Tm Concessions

Customs Duties and General Consumption T m

8 Free ermy of articles for factory construction.
9. Articles for factory construction not to be used for any other

10. Power of Minister to permit disposal of articles for factory con-

11. Application of Third Schedule to General Cmsumptim Tax Act.

purPo=.

StIUCtiOR

Income Tax

12. Relief from income ta..
13. Dividends.

PART NI. MisceNaneous

14.
15. [RepealedbyAct4of2001.]
16. Regulations

Restriction of use of factory.

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) 3

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L.WS
9 01 1961,

THE INDUSTRIAL INCENTIVES (FACTORY
CONSTRUCTION) ACT 3001 1961.

PART I-General

~ ~~~~

7of 1990
S. 19,

1601 1991
s. 64,

4 or 2001.

1. This Act may be cited as the Industrial Incentives (Factory Shondtle.
Construction) Act.

Inlapre-
mtion. 2. In this Act, unless the contrary intention appe-

“approved builder” means a company which holds a
licence or is a company listed in the Third njd
Schedule; Schedule.

4~2001

“articles for factory construction” means any of the s.2(a).

“company” means any company incorporated or
registered under any enactment in force in the Island
or any company which, though incorporated or
registered outside the Island, carries on business
or has an office or place of business therein;

articles specified in the First Schedule; First
Schedule.

“factory” in relation t e

(a) an approved enterprise under the Industrial
Incentives Act, means any such factory
premises as are referred to in section 4 of
that Act;

(6) an approved export manufacturer or an 4nWl
s. 2@) approved export service provider under the

4

30/1961
s. 2 ( S ) .

3011961
s. 2(b).

Second
Schedule.

AppVJVd
builder may
M”EmICt

ractoty.

INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION)

Export Industry Encouragement Act, has the
meaning assigned to it by section 2 of that
Act;

“licence” means a licence granted under this Act and
includes a licence transferred by virtue of section 5 ;

“recognized enterprise” means-

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(Q) an approved enterprise under the Industrial

Incentives Act; or

Export Industry Encouragement Act;
(b) an approved export manufacturer under the

“relevant statutory period” means the period commencing
on the date determined by the Minister to be the
date of completion of the construction of the
relevant factory by an approved builder and
ending fifteen years after the first day of January
next following such date of completion;

“scheduled enactments” means the enactments set out
in the Second Schedule.

3.-(1) Notwithstanding anything to the contrary, where
under any of the scheduled enactments a recognized
enterprise is required to establish a factory it shall be
lawful, subject to the provisions of this Act, for such
factory to be constructed by an approved builder instead of
by the said enterprise.

(2) Where pursuant to subsection (1) a factory is
being constructed by an approved builder, such construction
shall, subject to the provisions of this Act, be carried out
as if it were being carried out by the recognized enterprise

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) 5

concerned, and subject as aforesaid, the provisions of the
relevant scheduled enactment shall apply to the construction
of the factory as they would have applied if such construction
were being carried out by the recognized enterprise
concerned.

4.+1) The Minister may grant a licence to acompany ~~..‘“e~~o
in respect of the construction of a factory under this Act if mtor
he is satisfied that- revoke licences

30/1961
(a) the company is able to finance the construction of the S. 3(8).

factory; and

(b) the company has entered into an agreement with
the recognized enterprise concerned for the lease of
the factory for a period of at least five years.

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(2) Every licence shall be subject to such conditions .in001
as the Minister may specify therein, so, however, that it s,3(a).
shall be a condition of every licence that the company shall
retain ownership of the factory during the relevant statutory
period unless at some time during that period the company
sells or leases the factory.

(3) Where it appears to the Minister that a company 3011961 s. 3@). holding a licence has contravened any of the conditions
specified in such licence or any of the provisions of this
Act or the regulations made thereunder, he shall serve upon
the company a notice requiring it within such reasonable time
not being less than fourteen days, as may be specified in
the notice, to do all such things as will make good to the
satisfaction of the Minister any default or deficiency arising by
way of the contravention.

6 INDUSTRIAL INCENTIYES (FACTORY CONSTRUCTION)

4izWI (4) If a company fails to comply with a notice served
under subsection (3) then, after the expiration of the time
specified in the notice, the Minister may revoke the licence of
the company.

S. 3(b)

412001 (5j Where a licence is revoked pursuant to subsection
(4j, the company shall pay the tax concessions it received since
the date of the receipt by the company of the notice referred to
in that subsection.

S . 3(b).

Transfer of 5 . 4 1 j Subject to the provisions of subsection (2), where by
oblieationson virtue of the movisions in a licence the factory to which such
rights and
I

Sale or lease
of factory.
3011961
s. 4.
412001
S. 4(aXb)
(iMii).

412001
S. 4@)(iii).

412001
S. 4(b)(iv).

licence relates is sold or leased, as the case may be, by the
company holding the licence the purchaser or lessor, as the case
may be, shall from the date of such sale and in place of the
company-

(a ) be deemed to be the approved builder within the
meaning of this Act with respect to such factory
and the licence granted by the Minister under
subsection (1) of section 4 or under section 6, as the
case may be, shall accordingly be transferred to such
purchaser or lessor, as the case may be, in the
prescribed manner; and

(b) as respects matters arising after such sale or lease, as
the case may be, be entitled to all the rights and
privileges conferred, and be subject to all the
obligations and liabilities imposed, upon an approved
builder by the provisions of the licence and of this Act
and the regulations made thereunder.

(2) [Deleted by Act 4 of2001.1

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) 7

cranl or 6.+ 1) Notwithstanding anything to the contrary-
IlCenSeS 10
Jamaica

(a ) the Minister shall grant to the Jamaica Promotions Pmmotlom
COrporallO" Corporation established under section 3 of the 30,1961

Jamaica Promotions Corporation Act (which for the S 4
purposes of this section shall be regarded as a 7,1990
company within the meaning of this Act) a licence S 19
in respect of any factory to which this section
applies and the Corporation shall be deemed,
subject to paragraph (b), to be the approved
builder in relation to any such factory;

(6) a licence granted by virtue of this section shall be
in accordance with the provisions of subsection (2)
of section 4 and upon a sale or lease, as the case may 4,2001
be, by the Corporation of the factory to which a s.5.
licence relate+

(i) the relevant statutory period as respects
the factory shall be deemed to commence at
the date of such sale or lease, as the case 4/2001
may be, and to expire at the end of fifteen s.5.
years after the first day of January next
following either the date of the sale or lease, 4/2001
as
completion of the construction of the factory,
whichever is later; and

the case may be, or the date of the s . 5 ~

(ii) the provisions of section 5 shall have effect.

(2) This section applies to any factory which the
Minister may by notice published in the Gazette declare
to be a factory built by the Jamaica Promotions Corpora- m990
tion and in respect of which he considers it expedient that S. 19.
the Corporation should be deemed to be an approved
builder.

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION

(3) In this section the expression “factory” includes a
factory in the process of construction.

*ppl’Eauons 7. All applications for the grant of a licence shall be
addressed to the Minister and be in such form and contain such
particulars as may be prescribed.

for ILcence

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1611991
s. 64

Frm enUy
of articles
for factory
constmction.
3011961
s. 5 .
1611991
s. b4.
412001
S .
1211985
Sch.
412001
S. 6(a)(ii)

4/2WI
S. 6@).

PART 11-Tar Concessions

Customs Duties and General Consumption Tax

8 . 4 1 ) Subject to the provisions of subsection (2) an
approved builder shall be entitled upon the production
of its licence to the proper Customs Officer to import
into the Island in accordance with the terms thereof free
of all customs duties and general consumption tax articles
required for any of the purposes specified in subsection
(2), if the approved builder satisfies the Commissioner of
Customs and Excise that such articles are imported for such
purposes.

(2) The purposes referred to in subsection (1) are-

( U ) construction of the factory;

(b) repairs to or extension of a factory, or
(c) repairs to or the replacement of any apparatus,

machinery, tools, appliance or equipment contained
in the factory or any extension thereof.

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INDUSTRIAL ACENTITJES (FACTORY CONSTRUCTION) 9

9.+1) Subject to the provisions of section 10, where any ;:$z.
articles referred to in subsection (1) of section 8 have been SWQionnot
imported into the Island under a licence, such articles shall not kb:;d
be sold, exchanged, given away, exported from the Island or othm
applied for any purpose other than the purposes specified in ;zz
subsection (2) of section 8. S. 6 .

4,2001
S. 7((a)(iXii).

(2) Every person who contravenes subsection (1) shall
be guilty of an offence and on summary conviction thereof
before a Resident Magistrate shall be liable to a fine not
exceeding four hundred thousand dollars or to be imprisoned for
any term not exceeding twelve months or to both such fine and
imprisonment.

S. 7(b).

1 0 . 4 1 ) Where the Minister is satisfied that any articles
which have been imported into the Island under section 8 p m n d i s -
are no longer required for any purpose specified in subsection r,?z;w
(2) of that section, he may grant a permit to the approved builder r a d v --
to dispose of such articles in such manner as the Minister thinks Fkirn.
fit. S. S(aXii).

(2) No permit shall be granted under subsection (1)
until the approved builder has paid to the Commissioner of
Customs and Excise or has given security to the ,2,1985
satisfaction of the Commissioner of Customs and Excise, M.
that it will so pay all sums which but for the exemption 30,196,
given in section 8 would have been payable by way of s . 7 W
customs duties and general consumption tax upon the s,64,
importation of the articles referred to in subsection (1). 1 f f * 2 ~ 1

161195’1

S. 8(b).

10 INDUSTRIAL irNCENTIVES (FACTORY CONSTRUCTION)

Applicaliun 11. The exemption listed as item 4 in Part I1 of the Third
Scheduleto Schedule to the General Consumption Tax Act shall apply
Ce"Wd to a factory which is leased as if that factory were
CONJmp-
lion Tar residettial property.

of rnlhlrd

Act
4,2001
s 9

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Income Tax

Relief from 12.-(1) A company which holds a licence shall, in respect
3011961 of income obtained from the lease or other letting of the
S . S(a). factory to which the licence relates, be entitled in each year

during the relevant statutory period to relief from income
tax; and where in accordance with the provisions of its
licence the company sells the factory and would but for the
provisions of this section be liable to the payment of income
tax on the profits of the sale, it shall be entitled to relief from
income tax as respects such profits.

income lax.

(2) After the expiration of the relevant statutory
period annual allowances may be made upon the value of
the factory.

(3) If in selling a factory in accordance with the
provisions of its licence a company accepts a mortgage on
the factory, it shall, in respect of income obtained as interest
on the mortgage debt, be entitled during each year until
the relevant statutory period expires to relief from income
tax.

p:,'

(4) In this sec t iow

"annual allowances" has the same meaning as in the
Income Tax Act;

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTIOW 11

“value of the factory” means the original cost of the
construction of the factory.

13.+1) During the relevant statutory period an approved oividcndr.
builder shall place in a separate account all profits or
gains which have been relieved of income tax in
accordance with the provisions of section 12, and, if it
intends to pay a dividend to its shareholders out of the said
profits or gains, such dividend shall be paid out of such
account.

(2) Unless, pursuant to the first proviso to section LN,
37 of the Income Tax Act, the Commissioner of Taxpayer 165,1999,
Audit and Assessment otherwise authorizes, income tax shall
be deducted by an approved builder which pays any
dividend as if such dividend had been paid out of profits
or gains within the meaning of the provisions of the law
relating to income tax with respect to the deduction of tax
by a company on the payment of a dividend by that
company:

Provided that where income tax is being deducted in the 30,,961
case of any dividend payable to a shareholder who is not s . 9 ~
resident in the Island the rate shall be either-

(U ) twenty-five cents in the two dollars; or
(b) if ascertained at the date when the deduction is being

made, the rate at which the shareholder should be
assessed having regard to the provisions of subsection
(4),

whichever is less.

12 INDUSTRIAL INCENTI VES (FACTORY CONSTRUCTION)

(3) An approved builder making deductions of income
tax pursuant to subsection (2) shall be deemed to be

12j1985 collecting income tax on behalf of the Commissioner of
Inland Revenue and shall pay to the Commissioner of Inland
Revenue or to such person as he may direct the amounts so
deducted.

Sch.

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(4) A shareholder to whom a dividend is paid pursuant

to subsection (1) shall be exempt from incoma tax in
respect thereof if he is resident in the Island, and if he is
not soresident he shall be exempt-

(a ) from income tax in respect thereof if he is not
liable to income tax as respects that dividend in the
country in which he is resident; or

(b) if he is so liable, from so much of the income
L.K. tax as respects that dividend as the Commissioner
1691 999. of Taxpayer Audit and Assessment is satisfied

exceeds his liability in respect thereof in the
country in which he is resident.

(5) Save as is otherwise provided in this Part the
provisions of the law relating to income tax with respect
to the deduction of income tax from dividends and the
refund of income tax to shareholders shall apply to
dividends paid. by an approved builder pursuant to
subsection (1).

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(6 ) In this section-

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INDUSTRIAL LVCENTWES (FACTORY CONSTRUCTION) 13

“approved builder” includes a company which sells pit,’
or leases a factory in respect of which at the 4nwi
time of the sale or lease it held a licence, such s.’l(nxb)
sale or lease being in accordance with the pro-
visions of the licence;

“dividend” includes interest paid to a debenture

“shareholder” includes a debenture holder.
holder;

(7) The exemption horn income tax created by this iy:’
section extends to company profits tax. 2311972

S. 3 (Z)(b).

PART 111-Miscellaneous

14.+1) Subject to the provisions of this Act a factory
constructed under the provisions of section 3 or in relation fiw
to which a declaration has been made by the Minister iw:z’t,,)
under subsection (2) of section 6 shall not without the prior
approval of the Minister be used at any time during the
relevant statutory period for any purposes other thanthose
of a recognized enterprise. 0

The grant of such approval shall be subject to such Written
conditions as the Minister may in any particular circumStances
think necessary.

14 INDUSTRIAL INCENTIYES (FACTORY CONSTRUCTION)

(2) Any person using any such factory in
contravention of the provisions of subsection (1) shall be
guilty of an offence and on summary conviction thereof
before a Resident Magistrate shall be liable to a fine
not exceeding one thousand dollars and in default of
payment to imprisonment for any term not exceeding six
months and in the case of a continuing offence to a further
fine not exceeding one million dollars or to imprisonment
for a term not exceeding two years or to both such fine
and imprisonment.

4izw I
s. 12 .

-

15. [Repealed by Act 4 of 2001.1

Regulauons. 16.---(1) The Minister may make regulations with regard
t o -

(a) any matters required by this Act to be prescribed;
(b) the particulars to be furnished and the require-

ments to be fulfilled by a company applying for a
licence;

(c) any matter or thing connected with the construction
under this Act of a factory and its use by a
recognized enterprise or other occupier;

(d) any other matter or thing (whether similar to the
foregoing or not) in respect of which it appears to
him to be expedient to make regulations for the
purpose of carrying this Act into effect.

(2) Any regulations made under subsection (1) may
provide in respect of the breach of any of the provisions

4,2001 thereof that the offender shall be liable to a fine of one
hundred thousand dollars, or to such term of imprisonment

S 14. with hard labour not exceeding three months, or to both
such fine and imprisonment as may be therein prescribed.

S. 14.
4iZOOI

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INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) 15

FIRST SCHEDULE (Section 2)

All building materials, tools, plant, machinery, pipes, pumps,
locomotives, conveyor belts, or other appliances and materials necessary for
and used in the construction of the factory for the purposes of the relevant
recognized enterprise.

SECOND SCHEDULE (Section 2)

The Industrial Incentives Act.

The Export Industry Encouragement Act.

THIRD SCHEDULE (Section 2) 412001
S. IS.

1. Factories Corporation of Jamaica.

2 . Any company granted a licence under Jamaica Export Free Zones Act.

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