BASSETERRE, St. Kitts, April 27th, 2016 (PRESS SEC) – The Income Tax (Amendment) (No. 2) Bill, 2016, which had its first and second reading today, was passed in the National Assembly.
Prime Minister Dr. the Honourable Timothy Harris, in his capacity as Minister of Finance, sought leave in Parliament to introduce the Income Tax (Amendment) (No. 2) Bill, 2016. The Prime Minister said that he and his Team Unity Government continue to engage the business community and have determined that the timing is right to enact this amendment into law.
The Income Tax (Amendment) (No. 2) Bill, 2016 sought to amend Section 10 paragraph (l) of the Income Tax Act, Cap. 20.22, allowing businesses to claim tax deductions for salaries paid in excess of the current threshold of $75,000.00 per annum, all the way up to $90,000.00 per annum, the proposed new threshold.
Since 1982, the threshold was set at $60,000.00 per annum and, in 2012, the Act was amended to increase the threshold to $75,000.00.
The Government’s position is that increasing the threshold by an additional $15,000.00 per annum should stimulate economic growth and productivity. Whereas corporations could not take tax deductions for salaries exceeding $6,250.00 per month, the amended law would allow businesses to claim for salaries up to $7,500.00 per month. This would cover a lot more employees and also make way for companies to hire more skilled labour to complement the workforce.
Now that the Income Tax (Amendment) (No. 2) Bill, 2016 has been passed, businesses will be able to expense up to $90,000.00 per employee at the end of each fiscal year.
“We are hoping that the adjusted threshold would assist private sector entities with attracting and retaining personnel with the skills, knowledge and experience necessary for building competitiveness in the private sector,” the Honourable Prime Minister said, adding that, “To avoid the administrative complexities that are associated with retroactive payments, the increase in the threshold would take effect from June 1st this year. This amendment signals my Government’s ongoing efforts to bolster public-private sector partnership.”
The Income Tax (Amendment) (No. 2) Act of 2016 also signals the Team Unity Government’s commitment to creating a more favourable tax climate for corporations out of a recognition that taxes do matter for businesses and the economy as a whole.
A lesser tax burden increases businesses’ competitiveness due to lower costs and also has the capacity to increase foreign investment in St. Kitts and Nevis, as well as the country’s global ease of doing business ranking.
“This Bill is the result of consultations with the private sector, in particular the Chamber of Industry and Commerce,” Prime Minister Harris said. “My Government is one that listens to the people and will continue to engage the people on matters that would have positive effects for our country. We are committed to putting systems in place that would facilitate sustainable economic growth to redound to the benefit of every man, woman and child of our beloved nation,” the Prime Minister added.
*************************
DISCLAIMER
This article was posted in its entirety as received by SKNVibes.com. This media house does not correct any spelling or grammatical error within press releases and commentaries. The views expressed therein are not necessarily those of SKNVibes.com, its sponsors or advertisers
