KINGSTON, Feb. 01 (JIS):

            The House of Representatives on Tuesday (January 31) approved the Provisional Collection of Tax (Income Tax) (No.2) Order 2016.

            The Order, which was piloted by Minister of Finance and the Public Service, Hon. Audley Shaw, will allow the new personal income tax threshold to remain in effect.

            “The measure was recommended on the basis to alleviating the economic hardship which is being experienced by Jamaican taxpayers and, additionally, to provide low income earners with additional disposable income,” the Finance Minister said.

He noted that it was also recommended that the proposed increase in the personal income tax threshold should be implemented in two phases.

            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, and the full threshold of $1,500,096 will become effective on January 1, 2018.

            Mr. Shaw also mentioned that part of the measures was an increase in the tax rate from 25 per cent to 30 per cent for individuals whose statutory income is in excess of $6 million from the period July to December 2016.

The Finance Minister explained that the increase in the threshold was implemented as promised on July 1, 2016 by way of a Provisional Order, pursuant to Section three, Subsection one of the Provisional Collection of Tax Act.

            He added that the Provisional Collection of Tax (Income Tax) (No.2) Order 2016 was published in the gazette on June 30, 2016.

            “Pursuant to Section (3) Subsection four of the Act, an Order will cease to have effect if it is not confirmed with or without modification by resolution of the House of Representatives within the next 30 days on which the House sits after the date of publication of the Order. Basically, this is simply to confirm the continuation of the implementation of this programme,” Mr. Shaw said.

            Meanwhile, the Finance Minister confirmed that a new tax package will be brought to the Lower House to fund the second part of the income tax threshold.

            “We have not made it a secret that we are moving from the direct taxation of personal income taxes towards indirect taxation, so it’s an open book that we will have a tax package to replace the second phase of the personal income tax programme,” he said.

CONTACT: LATONYA LINTON