Senate Approves Budget

Photo: Donald De La Haye Government Senator, Matthew Samuda stresses a point while making his contribution to the debate on the Appropriation Act, 2017 in the Upper House on Friday (March 24).

Story Highlights

  • The Government is now authorised to spend the $710 billion earmarked for expenditure in the 2017/18 fiscal year, following the passage of the Appropriation Act 2017 in the Upper House on Friday (March 24).
  • The Bill, which stipulates how the funds are to be allocated to the various services and purposes of the Government, was approved following an extensive 11-hour-long debate in the Senate, with 18 persons making contributions.
  • The 10 Government Senators gave their support of the Bill, while the five Opposition senators present, abstained. Five members were absent.

The Government is now authorised to spend the $710 billion earmarked for expenditure in the 2017/18 fiscal year, following the passage of the Appropriation Act 2017 in the Upper House on Friday (March 24).

The Bill, which stipulates how the funds are to be allocated to the various services and purposes of the Government, was approved following an extensive 11-hour-long debate in the Senate, with 18 persons making contributions.

Much of the debate centred on the Government’s strategy to increase the personal income tax threshold to $1.5 million, which signifies a shift from direct to indirect taxation.

In his contribution, Deputy President of the Senate, Senator Aubyn Hill argued that the collection of taxes through indirect taxation such as General Consumption Tax (GCT) is a better system than the Pay As You Earn (PAYE) method as it widens the tax base.

“GCT reaches those people in a country like ours with a large underground (who evade paying taxes) much more effectively than Pay As You Earn (PAYE) could ever reach them. It’s a better and more equitable tax,” he said.

Also highlighting the benefits of the increased threshold was Leader of Government Business and Minister of Foreign Affairs and Foreign Trade, Hon. Kamina Johnson Smith, who piloted the Bill.

She noted that the new measure has already delivered increased disposable income for approximately 200,000 tax payers.

“(It) has provided additional funds to save; additional funds to make ends meet; additional funds for our hardworking teachers, nurses, police, civil servants, clerks and junior to lower management staff in the private sector; young people and older people trying to move up in life, trying to do more for themselves, trying to do more for their families,” she said.

Currently, 469,131 Jamaicans are on the PAYE tax roll. Of this number, a total of 397,083 persons will be exempt from paying taxes, as they will fall below the $1.5 million threshold.

Effective July 1, 2016, the first phase of the personal income tax threshold was increased from $592,800 to $1,000,272.

The second phase, which takes effect April 1, 2017, will see the threshold moving to $1,500,096. This adjustment will result in an additional increase of $499,824.

The effective threshold for the 2017 year of assessment will, therefore, be $1,375,140, and the full threshold of $1,500,096 will become effective on January 1, 2018.

The eventual passage of the Appropriation Bill at 9:34 p.m., was preceded by a vote as requested by Leader of Opposition Business in the Senate, Senator Mark Golding, who called for a divide.

This required the 15 Senators remaining in the chamber to vote individually as to whether or not they approved the budget.

The 10 Government Senators gave their support of the Bill, while the five Opposition senators present, abstained. Five members were absent.

The Bill was approved in the House of Representatives on Wednesday (March 22).

JIS Social