Inside the manifestos: PNP promises to cut income tax, GCT and customs duties but can't say when or by how much
Daraine Luton, Senior Staff Reporter
The People’s National Party (PNP) has promised to reduce income and general consumption taxes, but has declined to say precisely by how much, or when it would implement these reforms if it is returned to office in the February 25 general elections.
Taxation has become a major issue on the campaign trail since the Jamaica Labour Party (JLP) pledged to eliminate the income tax threshold for people earning up to J$1.5 million year.
The current threshold of $592,800 would remain for workers earning over $1.5 million a year.
The Finance Minister has said the JLP's initiative would remove more than 260,000 people from the tax roll and would cost more than $30 billion.
But Phillips will not commit to a date when a PNP Government would increase the income tax threshold only saying it is not unaffordable at this time.
"I am not going to give here, a commitment as to pace of doing so precisely because our intention is to continue to maintain a balanced budget and to reduce our debt,” Dr Peter Phillip, the PNP’s campaign director said on Tuesday.
"What we want to do is something that is prudent," he said.
The PNP, in its 2016 election manifesto published today said that if re-elected for a second term, it would raise the income tax threshold, and lower the rates of personal income tax, GCT and custom duties on consumer good.
Phillips, noted that the threshold for income tax has been raised three times in the past four years and that the administration intends to continue doing so.
"We also intend, overtime, to reduce the rates," he said.
The PNP pointed out that it has reduced the rate of standard rate of GCT from 17.5 per cent to 16.5 per cent in the last four years, reduced the customs rates on consumer goods and lowered the rate of income tax for unregulated companies from 33.3 per cent to 25 per cent.
In addition, an employment tax credit regime has been implemented for businesses as well as reform measures to allow for relief on consumables, machinery and equipment.
"The effective rate on Corporate Income tax is about 17.5 per cent now," Phillips said.
Today, the Finance and Planning Ministry told The Gleaner that it was unable to provide any update in respect to the JLP's proposed increase in the income tax threshold to J$1.5 million.
"It should be noted that the Econometric Unit of the Ministry of Finance and Planning is mandated to provide for analytical work within the confines of the Ministry of Finance and Planning and is not privy to engage in modelling for external parties," a ministry spokesperson said in an e-mailed response Gleaner queries.
The Income Tax Threshold was last increased on January 1, 2016, moving from $557,232 to $592,800.
The Finance Ministry said the increase resulted in approximately 8,441 people falling outside of the tax base and a potential revenue loss of $644 million.