President of the Grenada Trade Union Council (GTUC), Madonna Harford has appealed to the one-year old Keith Mitchell-led New National Party (NNP) government in St. George’s to exempt pensioners from paying income tax on their earnings.
Speaking on a local radio station, Harford said that pensioners on the island are crying out for help since they feel that they are being “unjustly treated” by having to pay taxes on their pension”.
The Mitchell government has lowered the income tax threshold from $5000.00 to $3000.00 per month as part of a move to earn more revenue to close a monthly EC$15 million dollar budget deficit.
According to Harford the local trade union movement has checked with its counterparts in the region on the issue of retired persons being taxed on their pension and there is no justification for local retirees to pay tax on their pension.
She said the situation which exist in Jamaica is that even if pensioners pay a little tax, the threshold far exceeds the normal rates levied on persons actively working in the service.
“So they pay a reduced income tax because it is not treated the same way as a working person”, she added.
In the case of Trinidad and Tobago, Harford said that retirees do not pay any tax on their income while in Belize the unions there are at a loss as to why Grenada would want to impose income tax on pensioners.
“We have an answer from Belize telling me that pension is and was never meant to be (taxed). So whoever thought (of taxing pensioners) does not understand the purpose of having a pension. What they are saying is if you think about taxing them you don’t understand (anything about pension)”, she remarked.
Harford contended that the Mitchell government needs to understand that a person’s pension cannot be treated as income because income relates to persons who work for a salary or wage.
“Pensioners in Grenada have been crying out because they feel that they are unjustly treated by paying taxes on their pension”, she said.
She urged the government to amend the income tax law because in the past Government Pensioners never paid tax on their income.
“I am calling passionately on our government to amend that law to exempt pensioners …”, she said.
However, Harford was quick to add that if the government is aware of pensioners who are working for salaries then it would be fair to put them into the bracket of those liable to pay income tax.
“If they (government) know of other pensioners working for income, whatever, for extra money whatever, tax that, not the pension”, she said.
Minister of Economic Affairs Oliver Joseph who also appeared on the same radio programme conceded that the income tax act makes provisions for anyone earning over $3000.00 to be subjected to paying tax on their income.