By the end of the week we'd have entered a new year and with it, several changes that can affect your pocket one way or the other.
As in most national budgets, some changes come into effect at the beginning of the calendar year - January 1st - as opposed to the beginning of the country's financial year - October 1st.
And while many of us have been paid our December salaries early (the salary that would see you through January), we felt we should give you some added information to help you decide if to cut back or not.
CNC3 Digital has gone through the 2016 Budget to look for the specific measures that come into effect just four days from now, on January 1st, 2016, including the non-financial ones.
1. PERSONAL ALLOWANCE GOES UP SO INCOME TAX DROPS
Madam Speaker, consistent with our 2015 Election Manifesto Promise, I propose to provide relief to working families by increasing the personal income tax exemption limit from $60,000 to $72,000. All taxpayers earning $6,000 a month or less will now be exempt from tax and will not be required to file tax returns. This will put additional income into the pockets of these individuals by reducing personal tax revenue by $250.0 million. This measure will take effect on January 1, 2016.
2. VAT ALSO DROPS, BUT MORE ITEMS BECOME VAT-APPLICABLE
Madam Speaker, the base and efficiency of the Value Added Tax regime have been consistently eroded since its establishment in 1990. I propose to improve efficiency in collection and to broaden the base by reviewing and adjusting exemptions and zero-rated items which are associated with nonessential or luxury items, and which are not critically important to the livelihoods and basic cost of living of our citizens. And consistent with our 2015 Election Manifesto Promise, I propose to reduce the Value Added Tax rate from 15.0 percent to 12.5 percent. The combination of widening the base, increasing collection and compliance, and reducing the rate is expected to yield approximately $4.0 billion. Further, for better administrative efficiency, I also propose to increase the threshold for Value Added Tax registration from $360,000 to $500,000. These measures will take effect on January 1, 2016.
3. DUTY EXEMPTION ON INPUTS INTO AGRICULTURE SECTOR
Madam Speaker, consistent with our 2015 Election Manifesto promise, in pursuit of our objective for achieving food security, we will exempt from all duties and taxes, inputs into the agricultural sector, including approved chemicals, pest control, approved vehicles, approved fishing vessels and equipment. These measures will take effect from January 1, 2016.
4. NO FURTHER REQUIREMENT TO COMPLETE IMMIGRATION FORMS
Madam Speaker, we are improving and facilitating the delivery of public services, commencing with the reintroduction of a 10-year validity period for passports, for adults over the age of 18, as well as removing the requirement for our citizens to complete immigration forms at all official ports of entry. This measure will take effect on January 1, 2016.
5. FREE DRIVERS' PERMITS & PASSPORTS FOR RETIREES
Madam Speaker, consistent with our 2015 Election Manifesto promise, we will initiate the process for the creation of a Retirees’ Benefits Programme that will in the first instance provide free drivers’ permits and passports for retirees over the age of 60. This measure will take effect on January 1, 2016. Additionally, later in 2016, we will introduce a system of discounts on utility bills for other categories of retirees, among other things.
6. PROPERTY TAX COMES BACK
We will take steps to amend certain legislative provisions, including the determination of rates, and implement the existing Property Tax Act 2009 with a view to having a fair and equitable property tax regime in place by January 1, 2016, using the old levels and old rates as a starting point. To ensure that no-one in need is adversely affected, there will be special provisions to ensure that the elderly and indigent with low fixed incomes are not disadvantaged, wherever they may reside.
7. GREEN FUND RATES INCREASE
Madam Speaker, for similar reasons, I propose to increase the rate of contribution to the Green Fund from 0.1 percent per quarter to 0.3 percent per quarter. This measure will increase revenue by $544.5 million and will take effect on January 1, 2016.
8. BUSINESS LEVY INCREASES
Madam Speaker, in order to spread the burden of adjustment across the society, I propose to increase the Business Levy from 0.2 percent per quarter to 0.6 percent per quarter. This measure will increase revenue by $327.5 million and will take effect from January 1, 2016.