The Government has proposed the increase of the income tax threshold to $130,000 in the 2025 National Budget. This means that employees’ income will only be taxed beyond that sum. Finance Minister, Dr Ashni Singh during his budget presentation today noted that this will result in an additional $8.5 billion in disposable income for workers and the removal of 22,000 persons from the tax net.
The income tax threshold has steadily increased over the past four years. In 2022, the threshold was raised from $65,000 to $75,000 and this was increased to $85,000 in 2023 and further to $100,000 in 2024.
In addition, Dr. Singh has announced that the first $50,000 earned as over-time pay will not be taxed.
“Persons who earn overtime for work beyond their normal working hours, the first $50,000 monthly of their overtime would be non- taxable. This measure is designed to ensure workers are rewarded for their productivity and effort. The estimated annual cost of this intervention is over $600 million,” the finance minister said.
Additionally, Personal Income Tax rate of 28 per cent to 25 employed and per cent for self-employed workers.
This measure will increase the disposable income of more than 100,000 of taxpayers and is estimated to put $3.6 billion back into the hands of these taxpayers.
The 2025 Budget debates will commence shortly. Following the passage of the budget, the measures announced will take effect.
