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Economy | TAX REFORM

No new taxes will be imposed in order to remove taxes for those who earn under $1.5 million

Broken

Source: JLP 10 Point Plan February 23, 2016

Friday May 13, 2016 | Jamaica Observer

$1m tax free for all PAYE workers, threshold moving to $1.5m next April

The Government yesterday negotiated its first major fiscal hurdle on the way to meeting pre-election commitments, announcing a two-phase increase in the personal income tax threshold from $592,800 to $1.5 million by next April.

However, to avoid leaving a $12.5 billion vacuum in the budget, due to the loss in income tax revenues, Shaw also announced a package of measures aimed at filling the gap based on the concept that, commensurate with reductions in income tax, there should be increases in consumption tax.

These measures were a $7 per litre increase in the Special Consumption Tax (SCT) on petrol for the benefit of the Consolidated Fund, expected to yield $6.4 billion; a SCT regime for Liquefied Natural Gas (LNG) and revision of the Heavy Fuel Oil (HFO) regime to yield $1.4 billion; an increase in the SCT on cigarettes, cigars, cigarillos and cheroots (including substitutes) to $14 per stick which, he said, should not push the price of cigarettes beyond $45 per stick and which will yield $574 million; and, an increase in Departure Tax to US$35 from the current rate of US$14.53, to yield $5.3 million.