Amendments to the Personal Income Tax Act took center stage at the February 3 sitting of Parliament, with Prime Minister and Minister for Finance Philip J Pierre outlining a series of changes aimed at easing the tax burden on citizens and encouraging savings and investment.
Addressing the House, Prime Minister Pierre explained that the amendments significantly increase several key allowances available to taxpayers.
One of the major changes is the increase in the child allowance.
“It increases the maximum child allowance to $5,000 per child below the age of 18 years,” the Prime Minister said. “Before, I think it was $2,500. You can now claim $5,000.00 for your child, Speaker.”
He also highlighted a substantial adjustment to the dependent relative allowance, noting the high cost of caring for elderly family members.
“It also increases the dependent relative allowance from $350.00, Mr. Speaker, to $5,000.00,” Pierre stated. “That is significant because, supposing you are carrying your dependent relative, you could only claim $350.00. Now you can claim $5,000.00, basically because you know the cost of taking care of elderly people is very high.”
Another key amendment relates to mortgage interest, particularly benefiting young professionals.
“You can also claim $40,000.00 for your mortgage,” the Prime Minister explained. “What that means is if you have no children or you have no dependent relative, you are a young professional, you can claim your entire mortgage. You can claim $40,000.00 for mortgage interest.”
He added that this change is intended to support individuals in the early stages of their careers.
“So that helps the up-and-coming professional who has not got a responsibility yet,” Pierre said. “In the early stages, he or she can claim $40,000.00 of mortgage interest. Before it was capped.”
The amendments also seek to encourage savings and strengthen credit unions. Under the revised legislation, taxpayers can now claim up to $10,000.00 in credit union shares.
“You can now claim $10,000.00 per credit union share under section 57 of the Act, Mr. Speaker,” Pierre said. “That again is to encourage savings, to encourage diversification of portfolio, and to create a nation of people who understand the value of savings.”
Drawing on cultural references, the Prime Minister stressed the importance of financial prudence.
“We can take from our parents and the people who came before us,” he said. “Within their little salaries, they always put something aside, and they said you put something aside for a rainy day. That is something that we must encourage, especially within our young people.”
One of the most significant changes announced is the full exemption of pension income from personal income tax.
“A very significant one, all income derived from pensions are exempt from the payment of personal income tax,” Pierre declared. “All income, whether government or private income from pensions. All pensioners, Mr. Speaker, get all income derived.”
He noted that this measure addresses a long-standing concern among retirees.
“You find that pensioners, after they have worked and paid tax, when they get the pensions, they have to pay more taxes,” Pierre said. “That is part of the government’s actions as it relates to pensions.”
The amendments form part of the government’s broader fiscal agenda aimed at providing relief to households, supporting savings, and recognizing the financial realities faced by families, young professionals, and pensioners alike.