Prior to Parliament’s Committee of Supply continuing the consideration of the budget estimates yesterday, Finance Minister Winston Jordan addressed the House and read the Income Tax (Amendment) Bill for the first time, a day after he made an announcement that he would be moving forward with his budget speech promises.
The Bill seeks to amend section 16(1) of the Income Tax Act mandating that workers no longer pay income tax on their National Insurance Scheme contributions.
The Bill will also increase the nine areas of deductible allowances for Income Tax purposes to 10.
During Jordan’s budget speech he revealed that the proposed amendment will cost the government $1.3B. He said that while there will be a significant loss in revenue there will be a net increase in disposable income for workers.
The Minister had stated that the amendment is geared towards 2016 at which point NIS contributions will no longer form part of taxable income. In the same breath Jordan revealed that the NIS will no longer benefit from the longstanding government tradition of subsidies.
The Minister had noted in his budget speech that he would also like to see additional amendments to the Act however these were not addressed in Bill no 8 of 2015.
Jordan proposed to change the word “shrimp” to “prawns” under the Fifth Schedule to the Income Tax Act Cap. 81:01 to allow for greater eligibility for export allowances granted to non-traditional exports.
He had stated that an amendment to Section 3 of the Regulations of the Income Tax Act Cap. 81:01 should occur to have “chargeable income” be defined as the same as in the Income Tax Act.
Legislation to give effect to budget measures is usually presented after the approval of the estimates and the appropriations bill.
