Budget 2021: Gov't to increase personal income tax allowance
Citizens will benefit from an increase in personal income tax allowance from January 1, 2021.
Finance Minister Colm Imbert announced the measure as he presented the 2021 national budget in Parliament on Monday.
He described the measure as a “huge fiscal stimulus to the economy” which is intended to provide relief to working families.
Many citizens continue to be affected by financial constraints brought on by the COVID-19 pandemic and Government is seeking ways to provide much-needed relief.
The Minister said the personal income tax exemption limit would be increased from $72,000 to $84,000 per year, meaning that individuals earning $7,000 (and below) monthly would not be taxed.
Imbert said this will put additional after-tax income of $3,000 per year into the pockets of over 250,000 taxpayers.
The Minister said this will come at a cost to Government, but it’s a necessary move to ensure citizens are taken care of during this time.
He said: “This bold measure will cost the Government $750,000, per year in individual income tax revenue. But, we firmly believe that in this difficult COVID-19 period it will stimulate the demand side of the economy by stimulating economic activity, consumption, sales and growth by putting more money in the hands of consumers.”