Income Tax Threshold Doubled

Finance and the Public Service Minister, Hon. Audley Shaw, has announced a 100 per cent increase in the income tax threshold during the 2009/10 fiscal year.
Opening the 2009/10 Budget Debate in the House of Representatives on April 23, Mr. Shaw said the threshold would be doubled from the existing figure of $220,500 to $440,000 by January 1, 2010.
He outlined that the adjustment would be effected in two tranches, with the first coming on July 1, when the figure will increase to $320,000. The second adjustment on January 1, 2010, will see the figure move up to $440,000. The last adjustment in the threshold was effected on January 1 this year, when the figure increased from $190,000 to $220,500.
It is expected that an additional 85,000 workers will benefit from the tax relief, bringing the total number of PAYE workers who will no longer pay income tax to 132,000.
“It should be noted that the Government is giving up revenue of over $12 billion on an annualised basis, in order to accommodate this level of income tax threshold. With this threshold in the first full year of implementation, some 191,000 PAYE workers will begin to take home an additional amount of $55,000 per year,” the Finance Minister said.
Mr. Shaw advised that the increased threshold would result in revenue losses amounting to $5.2 billion for the current fiscal year, but pointed out that “on an annualised basis, it will be well over $12 billion that we are giving up, in terms of this move.”
The Minister also announced adjustments in the threshold for pensioners. He advised the House that the proposed threshold adjustment should see the figure moving incrementally up to $80,000 per annum for the respective age groups. Currently, the income tax threshold for pensioners less than 55 years is $120,000 per annum, $265,000 for individuals between 55 and 65 years of age, and $310,00 for persons over 65 years.
“The new threshold for these pensioners will be: age 55 to 65 will move from $265,000 up to $400,000, and for those over 65 years old, it will move from $310,000 up to $480,000. This will be a revenue loss (to the Government) of $128 million,” Mr. Shaw informed the House.