Government has withdrawn a National Insurance Scheme (NIS) subsidy as it believes that the salary increases proposed for the public sector will cushion the impact.
“Mr. Speaker, to cushion the effects of the increase in NIS rates in 2003, the then administration agreed to a temporary cushioning of the impact by paying the equivalent of 1 percentage point of the increase for the workers. We believe the time is opportune to end this subsidy, given the substantial increases in salaries at the lower level, complemented by the removal of NIS contributions from being taxed. As a consequence, I wish to announce the withdrawal of the NIS subsidy with effect from September 1, 2015,” Minister of Finance, Winston Jordan said in presenting the 2015 Budget yesterday.
He also proposed the repeal of Section 8 of the Regulations of the Income Tax Act Cap. 81:01, and the amendment to Section 3 of the Regulations so that it reads: “In ascertaining the chargeable income of a person who is eligible for Mortgage Interest Relief there shall be allowed a deduction against his chargeable income, the amount of the interest paid to the Financial Institution in the year preceding the year of assessment.” He said that chargeable income shall have the same meaning as defined in the Income Tax Act. “In ascertaining the amount of the refund payable on the eligible relief, the Commissioner-General will ascertain the chargeable income of the taxpayer. If it is determined that the chargeable income is not sufficient and will result in reducing the chargeable income below zero, then the refunds paid on the mortgage interest relief to the taxpayer will be reduced accordingly and he will not be eligible for the full relief. The other change is that lending and licensed financial institutions will not be required to provide a statement of interest paid on the mortgage annually,” Jordan said.
