Increased rates explained - Tax department outlines how they will be applied

THE TAX Administration Services Department (TASD) is advising that the increase in personal income tax rate will be applied to all individuals earning above $5 million per annum.

In a release yesterday, the TASD says persons falling in the categories of employed, self-employed, partner or pensioner will be affected by the increased rate of income tax.

In a national broadcast on December 23, Prime Minister Bruce Golding announced that individuals with taxable income above $5 million per annum would be charged increased income tax rates.

This temporary new measure took effect yesterday and will end on March 31, 2011.

The TASD has pointed out, however, that all income levels would still benefit from the income tax threshold of $441,168, which also took effect on January 1, 2010. Pensioners will continue to be entitled to an additional exemption of $80,000 in respect of pension income derived annually from an approved pension or retirement scheme, as well as a further $80,000 exemption for persons age 65 years or over.

The increased income tax rate will be applied as follows:

Taxable Income - Marginal Rate