TWO Opposition Senators have called on the Government to consider raising the income tax threshold to a minimum $400,000 this year instead of the proposed $220,272.

GOLDING... argued that PAYE employees were being hard hit by rising commodity prices

The Senators, Noel Sloley and Mark Golding, in their contribution to the budget debate Friday, argued that "Pay As You Earn" (PAYE) employees were being hard hit by rising commodity prices which were not being met with matching salaries, and they needed further assistance.

Minister of finance and the public service, Audley Shaw, last month indicated that the income tax threshold was to be raised to $200,304 as of July 1, 2008 and further to $220,272, as of January 1, 2009. Currently the taxable threshold is $193,440.

But Slolely, referring to the Matalon report which recommended that the threshold should have been raised to $275,184 on April 1, 2005 and indexed to inflation, said if that had been done the current threshold would as of January 2008 be $382,227. The adjustment for July should have been in excess of $400,000 rather than what is proposed, he added.

"The PAYE employees, as it is, carry a disproportionate portion of the country's tax burden. These poor workers additionally have been ravaged by inflation," the senator said.

And colleague Senator Mark Golding, in his comments, said the proposed increase was "just too low", arguing that "more needed to be done to protect the interests of the mass of wage earners at the bottom of the scale".

"The problem with the mechanism of increasing the threshold is that it benefits wealthy taxpayers as much as it does those with lower incomes, and the objective of helping those at the bottom should not have to entail giving a tax subsidy to those at the top," Golding pointed out.

Persons earning under $350,000 a year should not be paying payroll taxes, Golding said, calling for a mechanism to be put in place to allow such persons to receive a rebate of the payroll taxes they "have suffered".

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