Effective next year, workers will no longer be paying income tax on their national insurance contributions.
This was announced by Minister of Finance Winston Jordan during his 2015 Budget speech yesterday. “Thus, in addition to the tax threshold, the Commissioner General must deduct the NIS contributions of the worker before determining his chargeable income. This will result in a loss of revenue of about $1.3 billion annually but, importantly, it would result in a net increase in the disposable income of all workers. This measure will be effective from Year of Assessment 2016,” Jordan said in his maiden budget presentation. The opposition PPP did not attend the presentation at Public Buildings.
To exempt the national insurance contributions from income tax, Jordan proposed an amendment to the Income Tax Act Cap. 81:01 by inserting “(i) National Insurance contributions by employees” after Section 16(b).
“Mr Speaker, with this amendment, workers will no longer be paying income tax on their national insurance contributions,” he said.
