New Income Tax Threshold Will Benefit Hard Working Jamaicans – Shaw

Finance and Public Service Minister, Hon. Audley Shaw, says the new $1.5 million income tax threshold is expected to have a positive effect on all hardworking Jamaicans.

He said that well over 250,000 taxpayers, including self-employed persons, will benefit from the new personal income tax threshold, which is being implemented over two years.

He noted that “$26.6 billion is being put back into the hands of people and everybody is, ultimately, going to benefit…even those who don’t directly get money by way of a payback because they are below the threshold,” he stated, in reference to the 592,000 persons earning below $1 million.

He was speaking at a post-budget media briefing at the Ministry’s offices at National Heroes Circle in Kingston, on Friday, May 13.

The tax threshold announced by the Minister, during his opening Budget debate presentation in the House of Representatives on Thursday (May 12), is being increased in two phases. On July 1, the threshold will move to $ $1,000, 272, and to $1, 500,000 as of April 1, 2017.

Meanwhile, Minister Shaw said the new revenue measures also announced, will not have a significant impact on inflation.

He said the technocrats in the Ministry have advised that the effect on inflation will be negligible at about 0.2 per cent.

“These taxes are not… (like the General Consumption Tax) that affect purchases of basic foods,” the Minister explained.

The revenue measures, aimed at raising $13.6 billion include: an increase in the Special Consumption Tax (SCT) on petrol by $7 per litre; increase in the SCT on cigarettes to $14 per stick; an increase in departure tax from US$20 to US$35; introduction of SCT for Liquefied Natural Gas (LNG); and a revision of the heavy fuel oil regime.

Mr. Shaw also allayed concerns that the increased SCT on fuel will spike electricity rates.

“This tax does not apply to the Jamaica Public Service; it is only related to fuel for (motor vehicles) only,” he assured.