More income for quarter million J’cans
THRESHOLD MOVEMENT INCREASES NET SALARY
THERE IS now extra money in the hands of more than 250,000 Jamaicans who are benefiting from the Government’s move to increase the personal income-tax threshold to $1.5 million.
Effective July 1, 2016, taxpayers, including Pay As You Earn workers, self-employed persons and pensioners, have seen an increase in their annual personal income-tax threshold to $1,000,272, up from $592,800.
This was the first phase of the income-tax break, which is being implemented over two years. The second phase takes effect on April 1 this year, which 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.
Whether the funds have gone towards savings, the purchase of items or a home, or just to keep up with the bills, beneficiaries have been heeding the advice of Prime Minister Andrew Holness and have been happy for the increase.
BETTER RETIREMENT PLAN
For 54-year-old accounting officer at e-Gov Jamaica Limited, Sydonnia Hylton, the tax break has afforded her the opportunity to better plan for her retirement. Wisely, Hylton has put the funds towards her monthly voluntary pension contribution.
Hylton, who has three adult children, felt it was best to invest in her future rather than “squander” the money, noting that she “wanted it to go to something that I can see down the road”.
She explains that with the increase in the income-tax threshold, she is taking home about $8,000 more per month.
Hylton said the tax relief was a good move by the Government to assist hard-working, deserving Jamaicans, adding that she was “looking forward to the additional amount come April”.
According to Tax Administration Jamaica, the threshold of $1,000,272 resulted in an effective threshold of $796,536 for the year of assessment 2016.
This means that individuals who earn more than $592,800 but less than $796,536, from which income tax was deducted before December 31, 2016, were entitled to a refund from their employers. Persons earning $796,536 or less no longer pay income tax.
Speaking on the new income-tax arrangement last year, Minister of Finance and the Public Service Audley Shaw noted that “$26.6 billion is being put back into the hands of people.
“Everybody is, ultimately, going to benefit ... even those who don’t directly get money by way of a payback because they are below the threshold,” he stressed.
Everybody is, ultimately, going to benefit ... even those who don’t directly get money by way of a payback because they are below the threshold.