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These changes are the results of major adjustments to the income tax regime, announced in the 2014/2015 Budget Statement by Prime Minister Dr. Kenny D. Anthony.
Firstly, in keeping with a promise made in the Saint Lucia Labour Party’s Manifesto, the deductible personal allowance will increase from $18,000 to $21, 000. This represents a further $3,000 in allowable deductions and will exempt 2,100 persons from the tax bracket.
Secondly, a reduction in the tax band from four to three, with consequent changes to rate of taxation, will redound to the benefit of all taxpayers. The proposed tax rates are as follows:
As explained by the prime minister in his presentation to the House of Assembly on Tuesday, May 13, 2014, “taxpayers who now pay 15 percent on their assessable income will now pay 10 percent. Taxpayers who now pay 20 percent on their assessable income will now pay 15 percent. Finally, taxpayers who pay 30 percent will now pay 28 percent.”
Dr. Anthony also announced changes aimed at simplifying and reducing the cost of the tax-filing process.
According to the prime minister, “Mr. Speaker I propose to eliminate the Housekeeper Allowance of $200, the Dependent Relative Grant of $350 and the subscriptions or donations to a professional association amounting on average to $1,500. As explained by the Prime Minister in his presentation to the House of Assembly on Tuesday, May 13, 2014, ‘taxpayers who now pay 15 percent on their assessable income will now pay 10 percent. Taxpayers who now pay 20 percent on their assessable income will now pay 15 percent. Finally, taxpayers who pay 30 percent will now pay 28 percent’.”
“Mr. Speaker, there is an important reason why we have to move in that direction. We have modernised our tax services by allowing electronic filing (e-filing) and registration. Having done so, it is inefficient and somewhat impractical to request taxpayers to bring proof of a housekeeper, a dependent relative or subscriptions or donations to professional associations every time they file electronically. It is essential that the filing process is seamless and without frustration.”
These new measures will take effect in January 2015.
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