No Review of Income Tax Threshold – Finance Minister

A review of the income tax threshold is not possible at this time, says Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke.

Opening the 2023/24 Budget Debate in the House of Representatives on Tuesday (March 7), Dr. Clarke said the transition to the new compensation system, the higher levels of pay, and the absorption of non-taxable allowances into basic salaries have pushed some public officers into higher tax brackets.

“Though net income is higher by a minimum of 20 per cent over the three years, I know that for certain public officers, the higher tax bracket is an issue [and] the question of the income tax threshold has arisen,” the Minister said.

“I understand that. But having added over $120 billion to compensation on a net basis between 2023/24 as compared with 2021/22, now is not the time for an adjustment to the income tax threshold. It cannot be afforded at this time,” Dr. Clarke added.

He further noted that “whenever that changes, from the track record of this Government, you can be assured that we will be the first to do it; not to talk about it, but to do it.”

Meanwhile, Dr. Clarke said Jamaica’s bureaucracy needs to be able to attract and retain managerial and technical talent.

“We need the best IT technicians, communication specialists, network engineers, legal draftspersons, civil engineers, data scientists, lawyers, accountants, prosecutors, economists, managers, and HR officers, to deliver premium public service to the public,” the Minister maintained.

“We have vacancies in the Economics Unit at the Ministry of Finance we have not been able to fill for years. This is also true in the Attorney General’s Chambers and in technical and managerial areas across Government where turnover, on account of salary levels, has been at epidemic proportions,” he added.

Dr. Clarke further emphasised that “the system is breaking because we don’t have sufficient talent for long enough periods in all the areas we need, and are unable to attract the talent needed because of the low compensation levels.”

He said the Government needed to make adjustments to the compensation levels in many of these technical and managerial levels, to be in a position to attract and retain talent in the public service.