Tuesday, February 18, 2025

Income tax exemption threshold is now set to $29,000

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As of January 1, 2025, a new income tax exemption threshold was implemented, raising the threshold from $26,000 to $29,000. This change means that workers earning less than $29,000 annually will no longer be required to pay income tax. As a result, over 3000 employees earning below this limit will benefit from making income tax payments, which is a significant advantage for those within this income.
In September 2024, Prime Minister John Briceño announced the Income and Business Tax (Amendment) Bill of 2024. The Senate approved the bill two months later, in November 2024. This amendment provides individuals earning between $29,000.01 and $32,000 with a personal relief of $20,000. A tax credit will also ensure their net salary remains at least $29,000. Individuals earning over $32,000.01 will also receive a personal relief of $20,000.
The Government of Belize has announced that amendments to income tax deductions will result in over $3.3 million being placed directly into the pockets of more than 3,500 employees. The Prime Minister explained that these reforms are designed to alleviate financial burdens and prevent “bracket creep,” a situation where salary increases lead to higher taxes and, consequently, lower net pay.
The new tax relief in Belize is likely to have various effects on the economy. An increase in disposable income due to a higher income tax exemption limit means that many low-income employees will retain more earnings. This may increase consumer spending, boost demand in local markets, and benefit industries such as retail and services. The tax relief initiative is expected to attract foreign investment, as a more favorable tax environment can make Belize more competitive. The government hopes this plan will relieve financial pressure on individuals, particularly in the aftermath of economic challenges, leading to an improved quality of life and a more vibrant economy.
Belize’s new income tax exemption is part of the government’s strategic effort to increase disposable income for low-wage earners. Both employers and employees are encouraged to consult their local branch of Belize Tax Services to ensure that the correct amount of income tax is being deducted.

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