Fiscal Realities Prevented Larger Increase in Income Tax Threshold – Clarke

Finance Minister Dr. Nigel Clarke is pointing to the country’s current fiscal realties as a partial reason for the modest income tax threshold increase.

In opening the Budget Debates on Tuesday, Dr. Clarke stated the country’s fiscal rules limit the government’s ability to absorb what could amount to billions of dollars in additional expenditure.

Daina Davey reports tells us more.

On Tuesday, finance minister Dr. Nigel Clarke announced an increase in the income tax threshold to $1.7 million. The adjustment comes with a $9 billion cost in revenue to the government.

It’s an increase many Jamaicans will find disappointing, with the opposition requesting a threshold increase to $3 million. However, Dr. Clarke says the government would be forced to give over $45 billion in revenue if such a measure was pursued.

The finance minister says undertaking such a measure is not inline with current financial rules.

He also says the majority of Jamaicans would not benefit at this time.

Instead the government undertook other measures such as increase the relief granted to pensioners and the elderly and providing an annual tax credit of $20,000 to those earning $3 million or less.

In terms of pensioners who’ve not benefited from an increase in their threshold since 2009, Dr. Clarke says the move provides the greatest equity.