New taxes today
Several new tax measures take effect today as the Government dips deeper into the pockets of most Jamaicans in an effort to finance its bills.
However, not all the measures will result in the Government taking more as at least two are designed to put more money in the hands of some persons.
Effective today, the income-tax threshold will increase, leaving a greater portion of salaries under $5 million tax-free.
The increase will see individuals benefiting from a tax-free income of $441,168 annually, which translates to $36,764 monthly, $16,968 fortnightly and $8,484 weekly.
The income-tax threshold for pensioners aged 55 to 65 years will also increase today, moving to $521,168, up from $400,736. For pensioners over 65 years, the increased threshold will be $601,168.
However, the increased tax-free portion of income will offer little, if any, benefit for persons earning more than $5 million.
Effective today, they will pay income tax of 27.5 per cent up from 25 per cent. Persons earning $10 million or more will pay income tax of 35 per cent.
The Government has announced that this is a temporary measure and will apply until March 31, 2011.
Other increases which take effect today include the hike in the general consumption tax from 16.5 per cent to 17.5 per cent.
Motor-vehicle licences for luxury vehicles with an engine capacity of 3,000cc and above will be increased by $4,000 while additional taxes of between 20 and 25 per cent will be applied to certain luxury goods such as jewellery, television sets exceeding 32 inches, shotguns and shotgun cartridges, jet skis and pleasure boats.
Motorists will also be paying more at the pumps with the introduction of a 15 per cent ad valorem tax on petroleum while smokers will find it more expensive to light up with an increase in the price of most cigarettes.
Yesterday, Carreras Ltd revealed the new tax measures meant the price for a carton of Craven 'A' and Matterhorn will now be $4,950, for Dunhill and Rothmans, $5,550.
"The suggested retail price per 20-pack of Craven A and Matterhorn (is $580)," the cigarette company said, noting that the expected popular price for a stick is $30.
Some tax changes effective January 1, 2010
1. Increase in the standard rate of general consumption tax from 16.5 per cent to 17.5 per cent.
2. Reintroduction of the 15 per cent ad valorem component of the special consumption tax (SCT) on fuel.
3. Increase in the SCT on cigarettes from the current $8,500 per 1,000 sticks to $10,500 per 1,000 sticks.
4. Imposition of 10 per cent GCT on the supply of electricity to residential (above 200kWh per month) and commercial/industrial premises.
5. Increased GCT rate on commercial imports at the rate of 22.5 per cent.
6. Increase in income-tax threshold to $441,168.
7. Increase in licence fees on motor cars/SUV equal to or greater than 2,999cc by $4,000 annually, bringing the total to a minimum of $16,000.