Bye, bye income tax - More than 100,000 Jamaicans to stop paying cess
Effective today an estimated 111,000 Jamaicans will no longer pay a cess on their salaries as a result of a $66,144 increase in the income-tax threshold.
The increase in the income-tax threshold announced by Finance Minister Dr Peter Phillips during the budget debate last May takes effect today with tax-free income moving to $507,312 per annum, up from $441,168 per annum.
This translates to a weekly tax-free income of $9,756.
Persons who are paid fortnightly will pay no income tax on $19,512 while monthly-paid workers will enjoy $42,276 of their income free of tax.
Weekly-paid workers should see an approximately $1,300 increase in their tax-free pay while monthly-paid workers should see the tax-free portion of their take-home salary increase by approximately $5,500.
This means weekly paid workers should see their take home increase by approximately $320 while monthly-paid workers will see an increase by approximately $1,400.
Income in excess of the threshold will continue to be taxed at 25 per cent.
In addition to the increased threshold, pensioners and persons aged 65 and over are also entitled to a pension exemption of $80,000 or an age exemption, also of $80,000.
In the meantime, the announced decrease in the corporate income-tax rate also becomes effective today.
Unregulated companies will see a reduction in the rate of corporate income tax (CIT) to 25 per cent, down from 33 1/3 per cent.
This brings the CIT rate for unregulated companies in line with the personal income-tax rate.
However, the rate remains at 33 1/3 per cent for companies regulated by the Financial Services Commission, the Office of Utilities Regulation, the Bank of Jamaica and the Ministry of Finance and Planning.