Just the facts - GCT and Service Charges

I have already posted this in another thread, but felt this topic needs to stand on its own. There has always been misinformation about the subject. Plus, I seem to be on a roll...

There is much misinformation out there about the sales tax and service charges in Jamaica. As Benjamin Franklin said there are only two things certain in life: death and taxes.

You can ask for "no tax", but you willl be paying the tax anyway. The government sees to that. The tax is a sales tax, called GCT here. And every Jamaican business is required to pay it.

Some businesses break the tax out of their prices and it is added to the bill, others include them in the price and subtract it out to pay the government. Either way, you are paying the tax.

Because of the business incentives of the past, some long running businesses are allowed to pay a reduced GCT. The two present tiers are 10% and 16.5%.

The incentive 10% only applies to older businesses and that waiver cannot be passed on to new owners. For all newer businesses, the rate is 16.5%. If you check your machine printed receipt at HiLo or most places for that matter, you will notice the GCT as a line item on the receipt.

The only optional charge a restaurant can have is the service charge. This is a charge added to the bill that is split between all hourly employees. This can be thought of as a general tip for all the employees, and you can add what you want for the server on top of that charge.

Do not confuse the service charge with the usual tip you may want the server to get. They will only receive a percentage of that charge based on the number of hours they worked versus the total number of hours worked by all employees.

It is illegal for a business not to pay GCT, which is based on their sales. If you mistakenly think that you are able to pay "no tax" just by asking, you are simply encouraging the restaurant to include the GCT in the price of their meal, increasing the cost by 16.5%.