The Inland Revenue Department (IRD) is in the process of sending out the necessary tax deduction tables and other relevant information, so that employers and business owners can comply with the new tax rates announced by the government in the 2018 National Budget.
Among the tax measures announced, by Minister of Finance Camillo Gonsalves in his 2018 National Budget presentation on February 5, are a reduction in the marginal rate for personal income tax from 32.5 percent to 30 percent.
Comptroller of the Inland Revenue Department, Kelvin Pompey told WEFM News that effective January 1, 2018, tax payers who were in the maximum bracket of 32.5 percent in 2017, would now be paying taxes at 30 percent in 2018, a reduction in taxes of 2.5 percent.
He said the standard deduction for personal income tax will be raised from $18,000 as it was at the end of 2017, to $20,000 in 2018, an increase of $2,000.
Mr. Pompey explained that tax payers, who were in the maximum bracket of 32.5 percent in 2017, would now be saving approximately $1,200 per year.
Tax payers in the 30 percent bracket would benefit from the increase in the standard deduction for personal income tax, and their annual savings will be $600, while those in the 20 percent bracket benefitting from the increase in the standard deduction would see a reduction in their salary of $400 per year.
Tax payers in the 10 percent bracket would see a tax savings of $200 annually.
The Comptroller of the Inland Revenue Department is encouraging employers who receive the new tax tables, to make the necessary adjustments during the months of February and March to employee’s tax accounts so that they can benefit as soon as possible from the new reduction in taxes.