‘It can’t even buy a bucket of KFC’ says Golding of extra income from increased tax threshold
“It can’t even buy a bucket of KFC”.
Those were the remarks of Opposition Leader Mark Golding on Tuesday as he ripped into the opening Budget presentation of Finance and Public Service Minister Dr Nigel Clarke, specifically the increase in the income tax threshold from $1.5 million to $1.7 million, which will see workers taking home an additional $4,166 per month.
That $4,166, he said, was inadequate for a family to buy a bucket of what is a favourite meal for many Jamaicans, who wish to share with family and friends.
Describing it as the “threshold disappointment”, Golding said Jamaicans were dissatisfied with the increase, as they were expecting the threshold to move to at least $2 million, based on a promise made by Prime Minister Andrew Holness during campaigning for the February 26 Local Government Election.
READ: Economist supports increasing income tax threshold to restore purchasing power
“During the recent Local Government Election campaign, the prime minister promised that the income tax threshold would be increased, in what he said would be a ‘1.5, 2.0’. Last September, I had called for an increase in the threshold to $3 million, to restore the real value of the $1.5 million of 2016, and to provide some buffer for future inflation.
The fact is that, since 2016, accumulated inflation is over 46 per cent in Jamaica, and an increase is required to restore the real value of the threshold that was last reset in 2016,” Golding said.
He added that “After the prime minister’s grand election pronouncement of a ‘1.5 2.0’, persons are understandably very disappointed that the minister (of finance) has announced an increase of the threshold to only $1.7 million. What they expected to be $2 million ended up being $0.2 million. This translates to a mere $4,166 more per month in their take home pay”.
Golding outlined that if Minister Clarke had, as phase 1 of restoring the value of the $1.5 million, even increased the threshold to $2 million, it would give persons an additional $125,000 per year or $10,400 per month in their take home pay.
“That would be a much more meaningful benefit. And it could be paid for using the $11.4 billion that has been allocated to the one-time $20,000 so-called reverse tax credit,” he said.
The Opposition leader said that in getting to $3 million, as tax inflows continue to grow, the threshold can be again adjusted as phase two.
