Speaking during the presentation of the St. Kitts and Nevis Budget on Tuesday, 9th December, Minister of Finance, Dr. Denzil Douglas, responded to that request when he confirmed that his Administration has agreed to increase the threshold from its current limit of EC$75,000, to EC$90,000. The Chamber had asked for EC$100,000.
One of the main arguments made by the Chamber, in their quest for the increase, spoke to the need to attract the best talent.
“If we are to remain competitive in attracting the best talent while offering income packages and benefits to our growing pool of trained and qualified Kittitian and Nevisian professionals, a more urgent consideration is needed in this regard,” said the Chamber President, Damion Hobson, back in September.
Hobson had stated, “we recommend that this ceiling be raised to a minimum EC$100,000. We simply cannot continue to lose our most gifted students to the US because that means we are subsidizing their development.”
He said the country keeps losing some of its best students every year to the more developed countries which “seem more amenable to compensating them for their newly acquired skills and qualifications after university and college”.
He had explained that too many students from St. Kitts and Nevis were electing not to return to the country because they felt that enough opportunities were available for top or even middle executive positions.
“That is why …the Chamber continues to call for the removal of restrictions on write offs for employees earning more than EC$75,000 annually,” said Hobson. The Finance Minister confirmed that the change in policy came from the consultations with the private sector body.
“As a direct result of this intervention, my Government gave due consideration to the request and now I am pleased to say that based on technical advice, in 2015 we will amend the Income Tax Act to increase the threshold from $75,000 to $90,000. This action will enable private sector entities to attract and retain personnel with the skills, knowledge and experience necessary for building competitiveness in the private sector.”
But, Prime Minister Dr. Denzil Douglas in his presentation also stated that since 1982, the Income Tax Act was amended to limit the deduction related to employees’ earnings to $60,000 per annum.
And as part of the government’s efforts to close loopholes in the system, the Act was amended again in 2012 to restrict personal income deductions to one cost in a business entity; the threshold was increased to its current amount of $75,000.