Thu | Sep 21, 2017

Gov't moves to save high income earners from retro taxes

Published:Friday | July 1, 2016 | 7:21 AM
THe Finance Ministry offices at Heroes Circle in Kingston.

The Finance Ministry says it's moving to change the law to prevent the retroactive implementation of a higher tax rate on earnings above $6 million a year.

Effective today, the tax rate moves up from 25 per cent to 30 per cent on the portion of earnings above $6 million.

However, Tax Administration Jamaica said the new rate would apply to the full calendar year in keeping with the ministerial order for the income tax changes.

This means people making more than $6 million a year would owe the government income taxes on salaries earned between January and June.

The Private Sector Organisation of Jamaica had raised strong objection to this.  

However, the Finance Ministry now says it will treat July to December as a distinct period for the application of the new tax.

It also says already the revenue administration system is being reconfigured and the relevant amendments to the legislation are being undertaken.

However, the ministry says come January 2017, the income tax rate will be normalised and the full 30 per cent rate will be applied to the portion of earnings above $6 million a year.