Some low income earners will be entitled to a tax refund when the new income tax threshold comes into effect on July 1.
The refund could be as high as $25,000, and is to be paid by the employer.
According to a Technical Guide from the Ministry of Finance dated June 14, 2016, employed persons will be eligible for a refund if their income for 2016 is greater than the old threshold, but lower than the new effective threshold.
The existing threshold is $592,800. while the new effective threshold for 2016 is $796,536.
It’s not $1-million because Tax Administration Jamaica, TAJ, calculates income tax based on annual salary.
And since the $1-million threshold only becomes effective in July, TAJ has to use an average of the old and new thresholds to calculate the rate for the year.
Those eligible should get a refund of all the taxes they’ve paid so far this year. The TAJ’s Chief Corporate Communications Officer, Meris Haughton, explains.
The guide from the Ministry says the refund is to be paid by employers, and can be spread out between July and December. Haughton says this must be done within the calendar year.