Prime Minister Dr. Keith Mitchell has given his strongest possible hint that more Grenadians would be called upon to pay Personal Income Tax.
Addressing a public forum held at the Grand Roy Government School in St. John’s last week Tuesday, Dr. Mitchell who is also the island’s Minister of Finance pointed out that a lowering of the income tax threshold was on the cards.
He said his cash-strapped seven-month old administration, which has been deemed as uncreditworthy by the Washington-based International Monetary Fund (IMF), is considering lowering the Income Tax Ceiling below its current $60,000.00 mark.
“As it stands right now, you have to make $60,000.00 in Grenada before you pay a little tax. It is suspected that the threshold will drop to about $36,000.00 annually. They (the IMF) are saying Grenada you have the best tax easy system in the world. If we’re going to go out there and fight for you, you have to drop the thing a little bit,” he added.
If implemented, the lowering of the income tax threshold will mark a significant shift in policy by Prime Minister Mitchell who over the years advocated the need for people to have disposable income in their pockets to spend in order to help grow the economy.
Dr. Mitchell, who is vehemently opposed to people paying Income Tax, told his supporters at the forum that Grenadians will now have to make sacrifices.
“We can’t tell you yet how far the drop will (be) but it seems like we’ll have to make some form of commitment because if others are paying taxes to help us, we are expected to make a little sacrifice,” he said.
The Prime Minister believes many people would still not be paying Income Tax, as many of them are not earning $3,000.00 a month.
Dr. Mitchell is due to travel to Washington at the middle of the month during which time he is expected to sign a deal with the IMF to help Grenada with its self-styled, “home grown programme of fiscal adjustment and structural reforms”
Former Finance Minister Nazim Burke believes the Income Tax Ceiling could be dropped as low as $2,000.00.
Burke who appeared on the “NDC Heartbeat Programme” last Sunday said this can bring major hardship on an average family.
“What would it mean for the family who was making $5,000.00 a month, went to the bank, took a loan, built a house, so they have their mortgage, bought a car and so they had their car loan on the strength that $5,000.00 will be coming into their pocket. Now the government imposes a tax and you’re losing about five or seven hundred and fifty dollars from your income – what will it mean for them? he asked.