Golding promises tax-free income up to $3.5m under PNP

People’s National Party (PNP) President Mark Golding has announced that a future PNP government will raise the personal income tax threshold, allowing persons earning up to $3.5 million annually to pay zero per cent income tax.

The pledge, made before thousands of supporters at a mass rally in Mandeville, Manchester, on Sunday night, came hours after the governing Jamaica Labour Party (JLP) unveiled its plan to reduce the personal income tax rate to 15 per cent from 25 per cent on a phased basis if it retains power.

“We are going to deal with that matter in a way that benefits those who need it more,” Golding told cheering comrades.

“Under the PNP government that is to come, we will be increasing the tax threshold so that those who pay taxes at 25 per cent, if they are earning up to $3.5 million a year, they will be paying tax at zero per cent … We will be raising the threshold to give them a tax-free income.”

Golding argued that the JLP’s proposal would unfairly benefit wealthier Jamaicans.

“I hear the Labourites are talking about adjusting the rate of income tax, but is that gonna benefit those who are very, very wealthy more than those who are less wealthy? Because the rate, once reduced for them, means they will be paying less tax because they are earning more to begin with,” he said.

Golding added that the PNP would not stop at $3.5 million. “As the economy improves and the fiscal space improves, we will raise that tax threshold further and further because we want money to be in the pockets of those who are struggling right now to make ends meet,” he told the crowd.

The announcement, which Golding described as a “sneak preview” ahead of the release of additional information on its manifesto tomorrow, is expected to sharpen the economic debate between the two main political parties heading into the September 3 general election.

The JLP revealed its tax plan in its 110-page manifesto, I Choose Jamaica: The Next Chapter, which was released Sunday evening. “We will build on our 1.5 [income tax threshold], the largest increase in the income tax threshold in decades, and embark on a disciplined, deliberate phased move toward a long-term base rate for personal income tax of 15 per cent,” the manifesto stated.

Currently, Jamaica applies a personal income tax rate of 25 per cent on annual taxable income, with a higher rate of 30 per cent applied to income exceeding $6 million.

The JLP’s pledge to increase the tax-free threshold to $1.5 million was considered a decisive swing issue in the 2016 general election, which it won. That policy was implemented over two years.

The latest promises are expected to be highlights of Tuesday's economy debate and the one between Holness and Golding on Thursday.

-Erica Virtue

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