Finance Minister Emphasises Importance of Tax Compliance

Minister of Finance and Planning, Hon. Dr. Peter Phillips, says several pieces of legislation have been passed to ensure that more persons comply with the law and pay their taxes.

“Our basic policy is to lower the rate and broaden the base,” Dr. Phillips said, during the question and answer segment of a forum, dubbed: ‘Money Talk Hackathon’, held at the Jamaica Pegasus Hotel, in New Kingston, on August 26.

“The laws have been passed and (are) now beginning  to come into effect, including most significantly, the Access to Third Party Information, which will allow the tax authorities to identify expenditures and target more effectively, the persons who are cheating on their taxes,” the Minister said.

He emphasised that every Jamaican has a role to play in ensuring that compliance is improved and maintained.

The Minister  said that  the Government’s position is that  if you get more people to pay their fair share of taxes, then the income tax threshold can be increased.

He informed that the Government has raised the tax free portion of personal income twice over the past three years.

“As we meet our obligations, we would like to reduce those rates even further, and raise the threshold,” he said.

Earlier this year, the Senate and the House passed the Income Tax (Amendment) Act, 2015, that will facilitate the provision of an additional $35,568 in tax-free income for workers, effective January 1, 2016.

The  law provides for an increase in the personal income tax threshold to $592,800 per annum, up from $557,232. This means  that the first $592,800 of each employee’s wage will be tax free.

This will translate into a cumulative increase of $85,488 in tax free income over the past two years.

The forum, which was organised by the Ministry of Youth and Culture, was aimed at fostering greater participation and inclusion of the country’s youth in matters pertaining to the economy.

A similar forum is being planned for western Jamaica.