In his 2014/2015 budget address Prime Minister Skerrit announced that “effective 1st January 2015, the non-taxable allowance will be increased from $20,000 per annum to $25,000 per annum. As a result of this policy anyone earning $25,000 and less per annum or $2,083 or less per month will not pay personal income tax. This equates to an additional 1508 people who will no longer pay income tax in Dominica”.
Again, not only will this bring benefit to those who will no longer be paying taxes but it will also mean a reduction in the amount paid for those who will continue to pay income tax.
Prime Minister Skerrit gives practical examples. He explained “a person earning $2,500 per month is now paying $125.00 per month in income tax. With the increase in the non-taxable personal allowance, the tax to be paid is estimated at $62.50. A person earning $3,500 per month is now paying $291.67 per month and will pay $212.50 per month with the change. A person earning $6,000 per month is now paying $933.33 per month and will pay $812.50 per month with the change. A person earning $10,000 per month is now paying $2,333.33 per month and will pay $2,187.50 per month with the change.”
For a public officer who earns $2,500 per month, the value of the benefit from this measure equates to a 3.0 percent salary increase and a 2.0 percent increase for one who earns $6,000 month.
Effective January 2015, there will also be an increase in mortgage interest allowance from $15,000 to $25,000 per annum.
It is Government’s estimate that this will attract several homeowners and will also encourage more people to build.
The Prime Minister highlighted that “one can well appreciate the compounded nature of these measures. A taxpayer who benefits from this relief along with the mortgage interest will pay much less tax in Dominica.”
While these measures will cost the state some $5.3 million, Government stresses its priority is to meet the needs of families.
“This government is working; we are working for the people of Dominica,” Prime Minister Skerrit stated.
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