New taxes not likely to affect workers below income tax threshold - Shaw
Damion Mitchell, Editor - Radio & Online
The Finance Minister Audley Shaw has rejected claims that the tax measures he unveiled Thursday are likely to be burdensome for employees now below the current income tax threshold of $592,800.
According to Mr Shaw, the new measures will impact inflation by only 0.2 per cent.
Yesterday, in announcing the new measures to raise an additional $13.7 billion in revenue, Shaw said that the Government would be increasing the income tax threshold to $1 million come July 1.
This means that people will no longer pay income taxes on the first $1 million of their annual salary.
It also means that people earning salaries above the current threshold will be taking home more pay.
But while that is happening, all consumers of petrol for example, will have to pay the new Special Consumption Tax of $7 per litre on gas and those travelling will have to pay a higher departure tax of US$35.
IN PHOTO: Finance Minister Audley Shaw (left) with PM Andrew Holness in Parliament yesterday
This has sparked concern that Shaw’s package will not benefit people now below the threshold.
At a post Budget Debate press conference this morning, Shaw sought to explain that the new taxes will not make it harder for people now exempted from income tax.
"The kind of taxes that we have imposed here are not taxes that are likely to directly affect that category," Shaw said.
IN PHOTO: Finance Minister Audley Shaw and his state minister Fayval Williams this morning.
"These are not GCT taxes that affect purchases of basic foods and things like that," he added.
In the meantime, Shaw said with the increase in the income tax threshold "everybody" will eventually benefit from the adjustment.
"Even those who don’t directly get money by way of a payback because they are below the threshold, they too can benefit," Shaw said.
He said the increased threshold means that people who will take home more money will be able to increase the salaries they will pay to their helpers and gardeners for example who may be below the current income tax ceiling.