$1,000 for first copy of TIN certificate, $5,000 for reprint; Income Tax (Amendment) Bill passed

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The Income Tax (Amendment) Bill 2016 after lengthy and heated debates in the National Assembly was passed by a Government majority.

According to the explanatory note, the Bill seeks to amend the tax threshold from $660,000 per annum to $720,000 per annum.

The Bill also reduces personal income tax rate from 30 per cent to 28 per cent for individuals earning less than $1,440,000.  It introduces a new rate of 40 per cent to be applied to the incomes in excess of $1,440,000. The Bill also repeals section 33E (4) of the Act.

It increases the rate of contributors’ tax from 10 to 20 per cent and imposes a 2 percent withholding tax on gross payments to contractors.

Additionally, the Bill also reduces the threshold of Mortgage Interest Relief to loans from $30M to $15M.

Finance Minister Winston Jordan said the work of the Tax Reform Committee assisted in the crafting of the Bill and that the amendments would radically change the tax system.

With the amendments citizens would now have a pay a $1,000 fee for the first copy of their TIN certificates and the reprint would attract a cost of $5,000.

According to Opposition MP, Juan Edghill the Bill seems to be adding muscle to the Guyana Revenue Authority (GRA) instead of addressing the administrative capabilities of the entity. He believes that the Bill is putting more pressure on the middle class.

Edghill reasoned that the new tax system would mean that the allowances that people earn would now be taxed; however, Jordan debunked this notion, noting that the allowances would not be taxed.

The Mortgage Interest Relief less than 250 Guyanese have benefited from this measure

According to Edghill the dream of young Guyanese is to own their own homes and vehicles, but with the new provision these persons cannot benefit from $30M Mortgage Interest Relief, pointing out too that they cannot buy vehicles more than four years old nor can they purchase used tyres. He raised concerns regarding the lack of consultations.

Supporting the Opposition’s arguments further was MP Vindhya Persaud, who said the Bill advanced speak of many measures and has various implications for the public, pointing to the fact that while the Bill will benefit some people, the middle class, which includes teachers, nurses and other professionals that have several financial obligations to fulfill monthly would face tremendous hardships.

These people MP Persaud said will see their income taxed by some 40 percent. She expressed remorse at the fact that a paltry amount of 250 have so far benefited from the Mortgage Interest Relief and now  less persons stand to benefit.

She urged that Government does all within its power to make people’s lives easier.

The Income Tax (Amendment) Bill 2016 – Bill No. 31/2016 – was published on 2016-12-20 and read for the first time on the same day.

 

 

 

 

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