Jamaica’s Finance Minister Audley Shaw has announced that the income tax threshold for all Jamaicans will be increased as on July 1. Shaw said the income tax threshold will start at J$1 million in July to be increased to J$1.5 million on April 1, 2017.
While on the campaign trail for the February 25 general election, the Jamaica Labor Party (JLP), then in opposition promised to provide income tax relief to persons earning J$1.5 million or less. However after coming to officer following their victory at the polls, the JLP decided to extend relief to all income earners under the PAYE (Pay as you earn) system.
As a result of this change, 251,000 people will benefit from the increased income tax threshold, up from the 118,000 originally projected. The Finance Minister also announced that the income tax rate of 25% will be increased to 30% for those earning $6 million and more.
During his presentation on the Government’s plans to finance the $580-billion budget, Shaw said the key structural benchmarks under the terms of the Extended Fund Facility between Jamaica and the International Monetary Fund (IMF) have been met for the December 2015 and March 2016 quarters.
He said while the performance of the economy in Fiscal Year 2015/16 was commendable in some aspects, there was still dissatisfaction with the rate of real GDP growth, which continues to be below one per cent.
Turning to inflation the Finance Minister said for 2015/16 , inflation had declined to a recent historic low of three per cent.
“The new Government of Jamaica had embarked on a concerted effort to boost economic growth significantly,” he said, referring to a recent declaration that the country is aiming at achieving five per cent growth within four years.
He disclosed that the annual rate of depreciation of the exchange rate had increased to 6.1 % as at 31 March 2016 compared to 5.0% at 31-March 2015.
