The President yesterday announced an increase in the income tax threshold from $28,000 to $35,000 and increases in pensions and public assistance.
He made the announcement during his end of year press conference reviewing the year 2007 at State House, and said the measures represented an effort to bring relief to the vulnerable groups most susceptible to the increased inflation that the Value Added Tax (VAT) and other factors had caused.
“We decided that from January 1, 2008, the income tax threshold will go to $35,000, and 36,000 people will now be exempt. We are going to [forego] $3 billion from this measure,” the President said. These were included among the provisions in the 2008 National Budget which would be read early next month, Jagdeo said.
The President emphasised that by every $1000 that the threshold went up, the treasury lost $425,000. The threshold was last increased in the 2007 budget.
The Old Age Pension will be raised from $3,650 per month to $6,000 per month and public assistance from $2,470 to $4,500. As a result of this, some 50,000 persons would benefit, Jagdeo stated.
He went on to say that the average inflation for the country’s economy in 2007 was 6.94 per cent and that the economy had grown by 5 per cent.
However, the fiscal deficit had been reduced from 2006, and the external debt had declined from US$1 billion to $700M, although this excluded non-Paris Club members. He said that the gross official reserves for 2007 were recorded at US$300M, and Foreign Direct Investment in 2007 exceeded 2006’s figure by about $50M. “We managed to maintain exchange and interest rates stability
