Income tax threshold increases January 1
EFFECTIVE January 1, 2006, the income tax threshold will be increased to $193,440, moving from $169,104 – a figure which has been in effect since July 1 this year.
Minister of Finance and Planning Dr Omar Davies gave details of the new threshold when he opened the 2005/06 Budget Debate in the House of Representatives on April 14 this year.
The minister pointed out that the government had also taken the decision to move the threshold to $275,000 in January 2007.
Thereafter, the threshold would be indexed to inflation, as proposed by the Matalon Committee in its report, Dr Davies told the House.
The two increases in the threshold for the fiscal year 2005/06 would result in a loss in revenue of about $1.4 billion, Dr Davies noted, but added that, on the other hand, some 66,700 taxpayers would benefit when the new threshold came into effect in January 2006.
Of that number of beneficiaries, some 54,600 taxpayers had already benefited from the increased threshold in July. This means that an additional 12,100 taxpayers will benefit in January.
Dr Davies also said that as of January 1, 2006, the tax-free allowances for pensioners under 65 years of age would be $238,000, while those over 65 years would benefit from tax-free allowances of $283,000.
