Parliament approves Income Tax (Amendment) Act 2008
Roseau, Dominica – October 20, 2008…… The Tax Reform programme of the Government of Dominica has entered the second phase with the passage in Parliament last week of the Income Tax (Amendment) Act 2008.
In the 2007/2008 Budget Address, Prime Minister and Minister for Finance, Hon. Roosevelt Skerrit announced the first phase of a comprehensive income tax adjustment programme, to be implemented over a three year period. As a result of that adjustment an additional 1,036 persons in Dominica stopped paying income tax.
The passage in Parliament last week of the Income Tax (Amendment) Act will bring into legal effect the second phase of that income tax adjustment programme. Effective January 1st 2009, the non-taxable allowance will be increased from $18,000 to $20,000. The new rates in the various tax brackets on the taxable income of every individual, unincorporated body of persons or trustees are as follows:
· The rate on every dollar of the first $20,000 of taxable income will be reduced from 18 percent to 16 percent ;
· The rate on every dollar of the next $30,000 of taxable income will be reduced from 28 percent to 26 percent ;
· The rate on every dollar of taxable income above $50,000 will be reduced from 38 percent to 36 percent.
The second phase of the income tax adjustment will result in 585 persons no longer paying income tax. The number of persons who now fall in the first tax bracket is reduced by 462, while the number in the second tax bracket is reduced by 89. Only 248 persons will now pay tax in the higher tax bracket.
According to the Ministry of Finance and Social Security, the total cost of the second phase of the income tax adjustment is $9.7 million for the full fiscal year or $4.9 million for the period January to June, 2009.