5 Things You Need to Know About Jamaica’s 2024 Budget

Here are five things you need to know from Jamaica’s new budget that will save you thousands of dollars this year!

Finance Minister Dr. Nigel Clarke presented the country’s 2024/25 budget on March 12. The budget outlines the government’s spending plans, as well as how they plan to earn the money they’re going to spend.

This year, they’re planning to spend J$1.3 trillion!  That’s about US$8.4 billion.

It’s the island’s biggest budget yet, by far – 30% more than last year’s budget.

Now let me just say this. It wasn’t long ago that we used to watch the budget presentation in fear!  Like OMG, what taxes are they gonna raise this time?

But for the past seven years, it’s been the opposite. Not only have there been no new taxes, but we’ve started watching the budget for goodies!  It come een like Christmas!  What am I gonna get?

So number 1 – is $20,000 in your pocket for all taxpayers who earn less than $3 million a year.

That’s about US$130,000, if you earn less than US$19,000 a year.

Minister Clarke called it a Reverse Tax Credit.

Now at first we weren’t fully clear what he meant, because a tax credit usually doesn’t mean money in your pocket.  Usually it just means you’ll pay less taxes.

But he specifically said…

“A tax credit, a cash credit of J$20,000,”- Finance Minister, Dr Nigel Clarke.

He said cash!  So I was like oh!!  Cash money?  Weh yuh nah say?  He clarified at a press conference the next day.

“Think about it like how you get the NHT refund,”- Finance Minister Nigel Clarke

So once all your statutory deductions for the year are paid up, you’ll be eligible to get back the $20,000.  

You’ll have to apply online.  The details will be announced later.

The second thing you need to know is that if you earn more than J$1.5 million, you’ll be saving another J$50,000 on your taxes each year.

That’s because the government has raised the income tax threshold from J$1.5 million toJ$1.7 million.

This means an extra $200,000 of your income is now non-taxable.

You would’ve paid 25% income tax on that $200k.

25% of $200k is $50,000, so that’s how much you get to keep.

This works out to a little over$4,000 a month extra in your pocket.

So between that and the $20,000 tax credit, the government is giving you an extra $70,000 to spend.

And if you’re a pensioner, you’ll get even more, which brings me to point number 3.

If you’re young, you can tell your parents or your grandparents on pension about this one.

So pensions are actually taxed.  They’re a form of income, so you pay the same 25% income tax on it. But pensioners get an exemption that reduces the amount of income they have to pay taxes on.

The Pension Exemption for people 55 and older has been increased from $80,000 to $250,000.

That means they’re getting an extra $170,000 that they don’t have to pay taxes on.

They would have paid $42,500 on that income.  Now they’ll get to keep that money.

And it’s even more for people 65 and older.  They get both a Pension Exemption AND an Age Relief Exemption.  

The Age Relief Exemption is also going up from $80,000 to $250,000.

So that’s another $42,500 that they get to keep. For a total of $85,000 back in their pocket for the year, or about $7,000 a month.

The fourth thing you need to know is about GCT – General Consumption Tax. 

This is the one tax that everybody has to pay because it’s a tax on almost everything you buy.  GCT is 15%.

But this year, the government is removing GCT from all raw foodstuff, both local and imported, so you’ll save 15% on these items.

Now this one is actually controversial, because this tax on imported produce helped to protect local farmers, who often felt that they couldn’t compete with cheap imports.

The Minister indicated that he HAD TO remove the tax from imports because of rules from the World Trade Organization.

However, FYI, the Minister also noted that these imported raw foods will still attract customs duties.  So chances are, it will still be cheaper to shop local.

Now speaking of duties, that’s the fifth thing you need to know that will save you money.

If you shop online or travel a lot, you’re going to be very happy about this.

The duty-free threshold has been raised from US$50 to US$100, effective April 1.

So save that Shein shopping spree til next month, and you can bring in up to US$100 worth of stuff duty-free.

And if you’re travelling, you’ll be able to bring in up to US$1,000 worth of stuff without paying duty.  It’s currently US$500.

The government also announced some other measures, but I’ll make another video about those.

In total, this is all going to cost the government US$25 billion.

So how are they going to pay for it?

Well, Minister Clarke said they will sell some of the government’s receivables.

Receivables are money that is owed to the government.  So it’s money on paper that they don’t physically have yet, but it’s definitely coming in.

Selling the receivables means somebody is going to give the government all that money upfront, and then they will collect the amount owed on behalf of the government later.

The benefit to the government is that they don’t have to wait on the money.  However, they will get slightly less money than is actually owed because the person buying the receivables will keep a piece for themselves.

Minister Clarke said the government will earn J$45 billion upfront from this.  

$20 billion will go to capital projects – that’s one-off spending on big items like schools and roads.

And the other $25 billion, they’re giving back to us, the people.