Jamaica Announces Measures To Level Tax Burden

by Amanda Banks, Tax-News.com, London

29 December 2009

Jamaica's Prime Minister, Bruce Golding, announced measures on December 23 to make the tax burden on taxpayers "more proportionate and equitable".

According to his announcement, the package of measures will include an increase in the personal income tax rate to 27.5% on income above JMD5m (USD56,400) and 35% on taxpayers earning in excess of JMD10m (USD112,800). The tax rate on income below JMD5m will remain 25%.

According to Golding, this is a temporary measure that will run from January 1, 2010, through to March 31, 2011, and is expected to yield around JMD1.32bn.

In order to reduce the tax burden on lower income earners, as previously announced, the income tax threshold, dividing those paying the 25% rate and exempt income, will be increased to JMD441,168 (USD4,979).

Other measures announced on December 23 include:

• An increase in the levy applied to luxury vehicles with an engine capacity of 3000cc and above by JMD4,000 per annum;
• Additional tax rates ranging between 20% and 25%, to be applied to certain luxury goods such as jewelry, television sets exceeding 32 inches, shotguns and shotgun cartridges, jet skis, and pleasure boats.

These two measures are expected to yield an additional JMD542m.

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