Tax ache
Senator Brown wants low-income earners exempt from education levy
OPPOSITION Senator Lambert Brown wants the Education Tax Act of 1983 amended to exempt Jamaicans earning less than $20,000 per week from paying the levy, which he argues is an excise on income.
Brown, who is also a trade unionist, argued that low-income earners do not benefit when the income tax threshold is increased, as he moved a motion in the Senate calling for the Education Tax Act to be amended.
He noted that the Act was passed as part of the taxation measures of the then Jamaica Labour Party Government, with the proceeds intended for educational purposes. However, Brown stated that the tax was never used as intended — rather, it went directly to the Consolidated Fund.
The Opposition senator said the tax is an income tax on both workers and employers, “which has to be paid by all eligible employees, including hundreds of thousands of Jamaicans earning minimum wage and others below the current PAYE (pay-as-you-earn) tax threshold”.
Said Brown, “Whereas the education tax in reality is a form of income tax, and whereas the provisions are in the current budget to increase the PAYE tax threshold for people earning more than $32,700 per week but no provisions are made for the relief of hundreds of thousands of workers earning less than $20,000 per week, be it resolved that this Senate calls on the Government of Jamaica to immediately review the Education Tax Act of 1983 with a view to relieving workers earning below $20,000 per week from having to pay tax on their income”.
The income tax threshold is now $1.8 million as of April 1, and will move to $2 million over the next two years. Finance and Public Service Minister Fayval Williams announced the increases in her maiden budget presentation in March.
“We are a responsible Government and so we will increase the threshold in three tranches to $1.8 million, then $1.9 million, then $2 million over a three-year period starting April 1, 2025,” Williams said at the time.
“Doing it this way means our hard-working taxpayers don’t have to guess and spell next year, or the next year, or the next year, if the threshold is going to increase,” she added.
Prior to the latest increase, the income tax threshold was hiked from $1.5 million to $1.7 million in April 2024.
