Finance Minister Fayval Williams Presents Budget

Introduction of New Measures

KINGSTON, Jamaica, CMC—The Government has announced a raft of measures aimed at improving the socio-economic situation of Jamaicans, including increasing the income tax threshold by two million dollars (One Jamaica dollar = US$0.008ts) over three years.

Finance Minister Fayval Williams, in her first-ever budget presentation to Parliament on Tuesday night, said that the income tax measure would go into effect from April 1 this year without indicating the cost of the initiative to the treasury.

She told legislators that the threshold would rise to J$1.8 million, slightly increase to J$1.9 million, and finally reach two million dollars.

“Doing it this way means our hardworking taxpayers don’t have to guess year after year if the threshold is going to increase,” she said, keeping with a trend set by the ruling Jamaica Labour Party (JLP) dating back to 2016.

Income Tax Threshold Increase

The threshold was raised to J$1.7 million in April, at a cost of nine billion dollars, at the start of the current fiscal year.

Williams also announced that in 2023, 652,220 individuals earned up to six million dollars annually and paid income tax.

Incentives for Consumers and Businesses

The Finance Minister said that her “good news” budget contained a raft of incentives for consumers and businesses, including a one-billion-dollar subsidy to assist the first 20,000 customers who sign up with Jamaica Public Service(JPS) for prepaid electricity, an 80 percent cut in bond on duties for new car dealers, and a longer repayment period on student loans.

She said that for the first time in a decade, based on fiscal rules, the Jamaica government could have run a deficit equivalent to “no more than 0.3 percent of GDP (gross domestic product), and that would still keep us on the path to 60 percent debt-to-GDP by fiscal year 2027/28”.

But she said Prime Minister Andrew Holness decided against it because it would send “a very bad signal to the world in an election year.”

Preserving Hard-Won Gains

“We want to preserve the hard-won gains of the people of Jamaica and their children and grandchildren so they will not have to suck salt through wooden spoons again,” she said.

Improving Taxpayer Convenience

Williams also announced that the Tax Administration Jamaica (TAJ) will introduce Saturday operations at select tax offices in every parish across the island, a move aimed at improving taxpayer convenience and boosting revenue collection.

“We will announce those dates, as those offices are open in every parish across Jamaica…. We should make it as easy as possible for Jamaicans to pay their taxes,” she said, noting that while approximately 80 percent of revenues collected by the TAJ is from online services, the initiative is expected to provide taxpayers greater flexibility and accessibility to tax services.

Supporting Low-Income Households

The Finance Minister said that the subsidy to assist JPS consumers is part of broader efforts to combat theft and support low-income households.

“This one billion dollars will go towards paying for house wiring and inspection, helping those with illegal connections to get legally and safely connected to the JPS grid,” she said, describing it as “the most ambitious program to allow affordable access to prepaid electricity.

“We know that the cost of house wiring and inspection can be prohibitive for many people, and so, as a caring government, we are absorbing that cost to begin addressing this massive electricity theft problem.”

Prepaid Electricity Initiative

William told legislators that prepaid electricity “will put legal electricity within reach for many.

“Because prepaid electricity allows you to buy the amount of electricity you can afford when you can, you have complete control. You can buy cards or vouchers from hundreds of outlets across Jamaica, just like how you buy phone cards now. You may also be able to top up online. The technology will make it easy.”

Williams said in January this year, Energy Minister Daryl Vaz told Parliament that in 2023, “the electricity stolen amounted to a staggering J$40.385 billion. That equals J$13,500 for every man, woman, and child in Jamaica.”

Conclusion

The Finance Minister’s budget presentation outlined several measures aimed at improving the socio-economic situation of Jamaicans, including increasing the income tax threshold, introducing incentives for consumers and businesses, and improving taxpayer convenience. The prepaid electricity initiative is expected to provide affordable access to electricity for many, and the government’s efforts to combat theft and support low-income households are welcomed.

Frequently Asked Questions

What is the new income tax threshold?

The income tax threshold will rise to J$1.8 million, slightly increase to J$1.9 million, and finally reach two million dollars over three years.

What is the prepaid electricity initiative?

The prepaid electricity initiative is a program that allows customers to buy electricity in advance, with the first 20,000 new prepaid customers receiving a J$4,000 credit for electricity per month for six months.

How will the government combat electricity theft?

The government will introduce a one-billion-dollar subsidy to assist the first 20,000 customers who sign up with Jamaica Public Service(JPS) for prepaid electricity, and will also provide house wiring and inspection to help those with illegal connections get legally and safely connected to the JPS grid.