$20,000 reverse tax credit won’t help with non-compliance, says Robinson
The intent of the Government’s decision to grant a $20,000 one-off payment in the form of a reverse tax credit will not be realised, according to Opposition Spokesman on Finance, Julian Robinson.
“While I support and understand the need to incentivise persons to file and pay their income taxes by March 31, I doubt this measure will have the desired effect. $20,000 is not going to be a large enough incentive for someone who currently does not file and pay income taxes to do so. Persons who already file and pay will continue to do so but it is unlikely that new taxpayers will be moved by this one-off payment,” said Robinson.
He was speaking Thursday in the House of Representatives as he made his contribution to the 2024/25 Budget Debate.
“I support the intent and we’re at one that it is important to try and encourage more people to file their income tax but I must say I do not see the potential take-up of this from persons who are not filing their taxes. The incentive of $20,000 which is a one-off payment, will not bring people into the tax net who’re outside,” Robinson emphasised.
When he opened the Budget Debate on Tuesday, Finance Minister Dr Nigel Clarke announced the reverse tax credit for persons earning less than $3 million per annum.
“The reverse tax credit means that every registered taxpayer who, in a completed fiscal year, did their part in contributing to society, whether through PAYE or being self-employed and who earn under that threshold, this government will provide them a reverse tax credit of $20,000,” Clarke told the House.
He explained that there are 570,000 Jamaicans who contribute to the society through statutory deductions and some through personal income tax who will benefit from this measure.
“The cost of this programme is $11.4 billion and we (the government) consider this money well spent,” he said.
The finance minister noted that reverse tax credits exist in other countries but was being implemented for the first time in Jamaica. He said there will be an established system for the processing and payment of the tax credit that will be managed by Tax Administration Jamaica.
