Advertisement
JIS News

Story Highlights

  • Deputy President of the Senate, Aubyn Hill, says the Government’s move to increase the personal income tax threshold to $1.5 million is working as predicted, resulting in greater revenue collection.
  • “This is exactly what has happened. In effect, lower the tax rate, give people more money to spend and collect more taxes. This is sound economics,” he said, while opening the State of the Nation Debate in the Senate, today (January 20).
  • Quoting the latest figures from the Statistical Institute of Jamaica (STATIN), Mr. Hill pointed out that the country’s economy grew by two per cent in the fourth quarter of 2016. It is also estimated that for the fiscal year 2016-2017 ending in March, the annual growth rate could be about two per cent.

Deputy President of the Senate, Aubyn Hill, says the Government’s move to increase the personal income tax threshold to $1.5 million is working as predicted, resulting in greater revenue collection.

“This is exactly what has happened. In effect, lower the tax rate, give people more money to spend and collect more taxes. This is sound economics,” he said, while opening the State of the Nation Debate in the Senate, today (January 20).

Mr. Hill noted that despite concerns expressed by sceptics, taxes garnered from the increased threshold were $5.3 billion higher than expected.

This, he said, is a 7.8 per cent increase over the budgeted figure for the April to December 2016 period.

Mr. Hill further reported that the intake of indirect taxes, represented by taxes on production and consumption, was also ahead of the budget by 5.3 per cent.

The Senator contended that the tax relief, which represents “sound economics,” is among measures contributing to the country’s improved economic performance.

Quoting the latest figures from the Statistical Institute of Jamaica (STATIN), Mr. Hill pointed out that the country’s economy grew by two per cent in the fourth quarter of 2016. It is also estimated that for the fiscal year 2016-2017 ending in March, the annual growth rate could be about two per cent.

“Agriculture, forestry and fishing, traditional and non-traditional export crops, mining and quarrying, construction and Business Process Outsourcing (BPO) and the benefits of the (increased) threshold, all contributed to this significantly improved level of economic growth,” he said.

The first phase of the income tax break, which became effective in July last year, saw the annual personal income tax threshold of taxpayers moving from $592,800 to $1,000,272.

The second phase takes effect on April 1, 2017, with the threshold moving to $1,500,096. This adjustment will result in an additional increase of $499,824. The effective threshold for the 2017 year of assessment will therefore be $1,375,140. The full threshold of $1,500,096 will become effective on January 1, 2018.

“The tax performance, improved and sustained consumer and business confidence, the shift to a greater reliance on indirect taxes and the implementation of the higher (income tax) threshold…bear noble testimony to the soundness of the $1.5 million tax relief and related policies,” Mr. Hill emphasised.