As of July 1, 2008, the income tax threshold, which is the level of income at which income tax begins to be levied, will be raised to $200,304 and then to $220,272, as of January 1, 2009.  

These increases will cost the Government $575 million according to Minister of Finance, Audley Shaw,  when he opened the 2008/2009 budget debate last Thursday.

These increases follow the recommendations made by the Matalon Tax Reform Committee report of 2004 which then said that the tax threshold should be increased immediately to $275,000.  That increase, the report said, would result in a more dramatic change in the General Consumption Tax (GCT).  The then Minister of Finance, Dr. Omar Davis, said "We have not flatly rejected any of the recommendations. What we would have changed would have been the pace at which we were seeking to implement them."

That  pace seemed to have come to a standstill as no changes were made up  to when they relinquished  governance to the JLP.

"What most people seem to have forgotten, is that they (the Matalon Committee) also said that, to complement the increase would be the removal of a large number of allowances, except those that are reimbursable," Davies had explained.

The PNP administration had come upon opposition from the trade unions to remove the allowances, including gratuities paid to hospitality workers, and stalled on the increase.