JIS News

A task force, comprising representatives of government, the Jamaica Confederation of Trade Unions (JCTU) and the Jamaica Employers Federation (JEF), is to be appointed to look into the plan to raise the income tax threshold.
The move comes as the government, due to procedural delays, was unable to meet the January 1 date for the raising of the threshold from $193,440 to $275,000.
Finance and Planning Minister, Dr. Omar Davies, who spoke to JIS News on Wednesday (Jan. 10) at the Jamaica Stock Exchange Investments and Capital Markets Conference in Montego Bay, informed that the decision to form the committee was made at the most recent meeting of the Memorandum of Understanding (MOU) monitoring committee. The JCTU and the JEF were represented at that meeting.
He said the government would be looking to have the task force up and running as soon as possible, adding that the names of the representatives should be forthcoming by the end of this week.
Dr. Davies, in his 2005 budget speech, had announced that the income tax threshold would be raised to $275,000 as at January 1, 2007. The recommendation for the increase was put forward in the 2004 Matalon committee report, but some preconditions were attached to the move, including the removal of some allowances.
“What most people seemed to have forgotten,” Dr. Davies said, “is that they (the Matalon Committee) also said that to complement the increase.would be the removal of a large number of allowances, except those that are re-reimbursable. They recognized that you could not simply raise the threshold and retain all the allowances and the compensation for the removal of the allowances would be the raising of the threshold”. The reality, he said, was that no allowances have yet been removed.
“So what the task force is going to do is to sit down and look at the allowances and determine where we can take action towards regularizing that, in order to justify the additional jump in the threshold. The plain fact is that if we were to raise the threshold and retain all the allowances, there would be a significant loss in revenues without any compensation,” he pointed out.