Concerns are being raised that the income tax threshold is now too low for government workers whose salaries have recently been bumped up.

“The reality is based on what is the cost of living today as against what it was last year and the year before. There is undoubtedly a need for it to be increased so persons who are at the bottom of the pay ladder will be able to deal with the increased cost of living,” Helene Davis-Whyte, president of the Jamaica Confederation of Trade Unions (JCTU), told the Jamaica Observer while explaining that workers are concerned about inflation.

“We have actually made the case to the Government to look at increasing that threshold [income tax] because based on where it is now, certainly for public sector workers, it comes across as you give with one hand and you [are] taking it back with the other via the route of income tax,” Davis-Whyte added.

She stressed that now is the opportune time for the Government to look at the income tax threshold. Although Davis-Whyte did not give a suggestion on what the new threshold could be, she noted the importance of income tax for the government and recommended that even if the Government cannot raise it all at once that it should put in place a plan to increase it over time so that the value of the increase to workers can be realised.

“I think they have to remember that when it was increased to $1.5 million, the Government had to implement a tax package of just about over $20 billion to be able to make up for that loss of revenue,” Davis Whyte lamented.

She, however, admits that increasing the income tax threshold will have to come after deliberations on what the new level will be and how the Government will make up any revenue shortfall.

Finance Minister Nigel Clarke made it clear throughout his budget presentation in early March that he is aware that with the transition to the new compensation system, the higher levels of pay and the absorption of non-taxable allowances into basic salaries have pushed some public officers into higher tax brackets and the question of income tax threshold would arise, however, he said, “A review of the income tax threshold is not possible at this time,” stressing that the Government simply cannot afford it.

But having non-taxable allowances added into basic salaries was of greater concern to travel officers who remain dissastified with the new system.

“For travelling officers, they don’t see the kind of increases that other public sector workers would see,” Davis-Whyte explained.

She said, for the most part, workers are satisfied with their salaries, but a number of travel agents are still dissatisfied with the rates they now have.

She further explained that there’s a guaranteed 20 per cent over two years, which means in the first year they would see a 10 per cent increase, “but when they compare with increases that others have gotten, it sort of pales in comparison, and some are still not comfortable with it being paid as a part of salary and would prefer to see it paid separate”, said Davis-Whyte.