Increase in income tax threshold among private sector’s budget proposals

Chairman of the Private Sector Commission (PSC), Gerry Gouveia Jr., on Tuesday said the commission is finalising its annual submissions to the national budget, with a strong emphasis on economic diversification, tax reform, and workforce development.

Speaking to the News Room, Gouveia Jr said the PSC values its role in the budget process and is encouraged that many of its past recommendations have been adopted by government.

For this reason, the PSC’s major focus this year is the continued increase of the income tax threshold to keep pace with inflation and economic growth.

“We’re asking for income tax threshold to continue to raise, to match inflation. But also, the economy is growing [and] we want to make sure that the take-home salary for our employees also starts to go up.

“We’re talking about non-taxable allowances that we can offer to our employees,” the PSC Chairman said.

The PSC is also advocating for non-taxable employee allowances and reductions in corporation tax, allowing companies to reinvest more into their workforce and operations.

One of the commission’s key proposals is the introduction of tax-deductible charitable donations.

Tax-deductible charitable donations are gifts of money or property made to qualified, tax-exempt organisations and several requirements are necessary for an enterprise to itemize its deductions.

He said such a mechanism could strengthen support for education, religious organisations, vulnerable groups, and hinterland communities.

“If you create an economically viable mechanism of charitable donations that promotes where you need the help, Private Sector can now give the help and it’s not coming out as an additional expense for private or public sector,” he said.

Notably, Gouveia Jr said the nation is being positioned to strengthen STEM programmes, hinterland communities and develop training programmes in a charitable way without “breaking the bank”.

Additional proposals include adjustments to vehicle duties and broader tax reforms aimed at improving competitiveness, supporting diversification, and ensuring workers earn more at the end of each month.