THE GOVERNMENT has backed off from its promise to increase the income tax threshold in the wake of the recent 20 per cent increase in the National Minimum Wage.Dr. Omar Davies, minister of finance and planning, will instead issue an Order of Remission of Income Tax for minimum wage earners, which will take effect when the new minimum wage kicks in on January 31.
This order will prevent employers from deducting income tax from employees receiving the minimum wage of $2,400 per week.
Information Minister Burchell Whiteman told journalists during yesterday's post-Cabinet press briefing at Jamaica House that the decision was taken because there are several implications for the general lifting of the income tax threshold.
NO SOLUTION
"At this point in time, the lifting of the threshold will not be the solution to the problem," Minister Whiteman said.
In particular, he noted that the wholesale review of the taxation system is still under way and is likely to result in the streamlining of the current tax arrangements.
Last week, both Minister Whiteman and Prime Minister P.J. Patterson indicated that the tax threshold would soon be increased to address concerns that the increased minimum wage had dragged the poorest workers above the $120,000 per year tax threshold.
- R.H.
