Dear Editor,
The new Administration of the Jamaica Labour Party (JLP), through Prime Minister Andrew Holness and Finance Minister Audley Shaw, have recommitted themselves to their campaign commitment of removing income tax from employees earning up to $1.5 million, whilst maintaining the allotted threshold for those earning between $1.5 million and $5 million, with those earning above $5 million losing the benefit of the threshold. Should the JLP Administration maintain its position, their salaries will be fully taxed at 25 per cent.
Recalling the prime minister’s inaugural address, he highlighted examples of the things those who are to benefit from the tax break can realise with the extra funds, such as affording a mortgage. This question begs to be answered: What will become of those with existing obligations, such as mortgage payments, who stand to be worse off as a result of having to give up the benefit of the threshold.
At the current threshold of $592,000 per annum, the new tax policy would result in a loss to people earning above $5 million of approximately $12,000 monthly. One could therefore conclude that the policy is an iniquitous one which serves as a redistribution of wealth from one segment of the PAYE cohort to another.
As this segment of the cohort becomes poorer, they must now examine their monthly budgets with a view for realignment. But what of those who will find it difficult to realign given their fixed cost obligations — Tough luck to them, is it?
The finance minister indicated to the media subsequent to his swearing-in that there is a positive difference based on their projections of the cost of their proposal and what they have subsequently learnt. With this information, can the threshold be maintained for the cohort referenced?
Fabechez@gmail.com
The new Administration of the Jamaica Labour Party (JLP), through Prime Minister Andrew Holness and Finance Minister Audley Shaw, have recommitted themselves to their campaign commitment of removing income tax from employees earning up to $1.5 million, whilst maintaining the allotted threshold for those earning between $1.5 million and $5 million, with those earning above $5 million losing the benefit of the threshold. Should the JLP Administration maintain its position, their salaries will be fully taxed at 25 per cent.
Recalling the prime minister’s inaugural address, he highlighted examples of the things those who are to benefit from the tax break can realise with the extra funds, such as affording a mortgage. This question begs to be answered: What will become of those with existing obligations, such as mortgage payments, who stand to be worse off as a result of having to give up the benefit of the threshold.
At the current threshold of $592,000 per annum, the new tax policy would result in a loss to people earning above $5 million of approximately $12,000 monthly. One could therefore conclude that the policy is an iniquitous one which serves as a redistribution of wealth from one segment of the PAYE cohort to another.
As this segment of the cohort becomes poorer, they must now examine their monthly budgets with a view for realignment. But what of those who will find it difficult to realign given their fixed cost obligations — Tough luck to them, is it?
The finance minister indicated to the media subsequent to his swearing-in that there is a positive difference based on their projections of the cost of their proposal and what they have subsequently learnt. With this information, can the threshold be maintained for the cohort referenced?
Fabechez@gmail.com