Law amended to give effect to new income tax threshold
Legislation has been amended to give legal force to the increase in the income tax threshold effective July 1, 2016.
Tax Administration Jamaica (TAJ) said Monday that the change will positively impact employed and self-employed individuals as well as pensioners.
According to TAJ, the
new July 1 threshold of $1,000,272 will result in an effective threshold of $796,536 for the year of assessment - 2016.
Giving a breakdown of the tax savings for persons earning a million dollars or more per annum, the TAJ says the monthly amount will be $8,489, the fortnightly $3,918, while those paid weekly will receive tax savings of $1,959.
The tax authorities also pointed out that individuals who earned in excess of $592,800 but less than $796,536, from which income tax was deducted, may, before December 31, 2016, have the tax that was paid/deducted, refunded by their employers. Persons earning $796,536 or less will pay no income tax.
The TAJ further explained that because some persons who are now above the
current threshold of $592,800, but will fall below the new effective threshold of $796,536 as at July 1, they will be entitled to a refund of what has already been paid.
And, effective April 1, 2017, there will be another increase in the threshold from $1,000,272 to $1,500,096. The TAJ said this adjustment will result in an additional increase of $499,824.
The effective threshold for the year of assessment -
2017 - will therefore be $1,375,140. The full threshold of $1,500,096 will become effective on January 1, 2018.