Owen Arthur Announces Major Change In Income Tax Threshold

by Amanda Banks, Tax-News.com, London

25 April 2003

Prime Minister and Finance Minister of Barbados, Mr Owen Arthur, earlier this week in the Lower House unveiled an Income Tax Amendment Bill which will substantially raise the threshold at which income tax becomes payable.

Explaining that the bill is designed to build upon the principles set out in the 2002 budget, Arthur announced that the income tax threshold will effectively be lifted by $10,000 over the next four years in $2,500 increments. The first shift upwards is intended to take effect on January 1 next year. Consequently, after four years, no income tax will be payable on earnings below $25,000 per annum.

“This will allow households to better plan their affairs...and every year the amount of taxes will be reduced by the combination of the fact that the rate of tax will fall from 25 to 20 per cent and 37.5 to 35 (per cent) and the income below which tax is not payable will raise from $15,000 to $25,000,” the Prime Minister explained.

Mr. Arthur also mentioned his commitment to increasing allowances, particularly in the area of property, and announced an increase in home allowance from $3,500 to $6,000 this year, with provision for a further $4,000 increase to follow.

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