Starting from January 1, 2021, all citizens who earn $84,000 or less a year will be exempt from income tax.
Finance Minister Colm Imbert said the increase in the tax bracket from $72,000 to $84,000 a year will cost the State $750 Million a year.
“All individuals earning $7,000 a month or less will now be exempt from income tax. This will put additional income of $3,000 per year into the pockets of over 250,000 individual taxpayers,” Imbert said.
He said despite the high cost to the state, the Government believes the move is necessary to stimulate the ‘demand side’ of the economy by stimulating economic activity, consumption, sales and growth by putting more money in the hands of consumers.
“We believe that through the multiplier effect the net effect on our GDP will be much more than $750 million,” Imbert said.
Reporter: Sharlene Rampersad