Head of the International Monetary Fund (IMF) Staff Mission Team to Jamaica, Dr. Uma Ramakrishnan, has welcomed the Government’s implementation of the amended personal income tax threshold, describing it as a “bold step” in restructuring the revenue regime.
Phased implementation of the new regime, which commences on July 1, will see the threshold increase to $1.5 million by the start of the 2017/18 fiscal year, on April next year.
Details of the undertaking were outlined by Finance and Public Service Minister, Hon. Audley Shaw, during his opening 2016/17 Budget Debate presentation in Parliament on May 12.
Speaking at the IMF quarterly review media briefing at the Ministry of Finance and the Public Service in Kingston on Friday, May 20, Dr. Ramakrishnan said the shift from direct to indirect taxes “will reduce the marginal and average tax rates for the majority of the income taxpayers, improve (productivity), and encourage workers.”
Additionally, the Mission Head said the decision to implement measures to safeguard revenues and debt sustainability were also “bold and essential”.
Mr. Shaw, who also spoke at the briefing, noted that the decision to revise the threshold was aimed at “promoting equity, efficiency and uniformity in the tax system.”
In thanking the IMF for its technical support provided in this undertaking, Mr. Shaw said it was the “first step in our efforts” to shift the source of revenue generation from direct to indirect taxes.
Dr. Ramakrishnan suggested, however, that the administration give consideration to strengthening provisions to protect the poor and vulnerable, prior to implementing the second phase of the threshold.
