The Jamaican Government has just revealed plans to bump up the income tax threshold from $1.5 million to $1.7 million starting April 1. This adjustment entails a significant $9 billion reduction in government revenue.
Dr. Nigel Clarke, the Minister of Finance and the Public Service, unveiled this update on Tuesday during the kick-off of the 2024/2025 Budget Debate at Gordon House.
Essentially, this means that employees subject to Pay-As-You-Earn (PAYE) won’t have to fork over income tax on their first $1.7 million in earnings.
Clarke clarified that although the government couldn’t push the threshold higher at the moment, as it would result in a considerable revenue loss potentially impacting economic stability, they remain committed to maintaining the current threshold.
Other budget announcements
Several other major announcements were made during the budget debate:
- Dr. Clarke announced that the government is raising the thresholds necessary for the Public Procurement Commission to approve contracts. The limit is being increased from $30 million to at least $60 million, enabling procuring entities to authorize contracts of higher value without external approval. Additionally, the threshold for single-source procurement is being raised from $1.5 million to $3 million, and for works, the threshold is being adjusted from $2 million to $5 million.
- The government is moving forward with plans for an unemployment insurance scheme for Jamaicans who lose their jobs. Dr. Clarke said persons would be eligible to receive a percentage of their previous weekly income for a fixed period of time.
- Some $120 million has been allocated to complete the rehabilitation of JamWorld Entertainment Complex in Portmore and Fort Rocky in Port Royal as fully functional 24-7 entertainment zones.
Read: Portmore venue to become Jamaica’s first 24-hour entertainment zone
- Jamaicans will pay no custom fees to import personal items valued up to US$100, starting April 1. Dr. Clarke said the move will cost the government $864 million. The move of the threshold for Jamaicans returning with goods bought abroad from US$500 to US$1000 will cost $351 million.
Read: Jamaican government to double thresholds at Customs
- Jamaican taxpayers who earn under $3 million annually will qualify for a $20,000 tax refund.
- Effective April 1, the Students’ Loan Bureau will no longer require guarantors for students to access tertiary financing. Students applying for an SLB loan currently require one guarantor, down from the previous two. Dr. Clarke said 4,200 grants of $60,000 each will be available to low-income applicants of the Students’ Loan Bureau.
Furthermore, Clarke assured the public that for the seventh consecutive year, Jamaicans won’t be hit with any new taxes.
