Budget 2017/18 – How does it affect you?
The Minister of Economy Aiyaz Sayed-Khaiyum has announced a $4.35 billion national budget which puts more than 90,000 taxpayers under the minimum income tax threshold.
What are the new tax policies?
$26m Tax Cut
Taxpayers earning less than $30,000 per annum will not be required to pay income tax. 14,500 taxpayers are expected to be affected. The previous threshold was $16,000. The loss from taxes is $26m.
Tax Amnesty until 31 December 2017
General Tax Amnesty – No penalties for taxpayers with revenue below $1.5 million
Declaration of Foreign Assets – No taxes and penalties
Indirect Tax Rates
Environment and Climate Adaptation Levy (ECAL) – 10%. Replaces the Environment Levy.
ECAL applies to luxury cars above 3000 cylinder capacity.
Service Turnover Tax – Decrease from 10% to 6%.
Value Added Tax – Remains at 9%.
Levy on plastic bags – 10c. Gradually imposed.
Duty Increase by 15%
Cigarettes, Tobacco, Alcohol, Soft Drinks
Duty Decrease from 32% to 5%
Energy Bars, Readymade Towels, Baby Cots, Baby Shoes, Fabricated Steel Structures, Insulated Cables, Louvre Frames, Gloves, Wetsuits, Neoprene Boots
Duty Decrease to 0%
Microphones, Speakers, Baby Wipes
How will the Budget be funded?
Direct Taxes – $790.4m
Indirect Taxes – $2.3b
Fees and Charges – $129.2m
Overseas Loans – $181.1m
Domestic Loans – $532.7m