Income Tax Exemption to Increase for Low-Income Earners Starting January 2025

In addition to the updates given on the country’s economic performance, Prime Minister Briceno came bearing gifts.  He announced that come January 1, 2025, the income tax bracket would shift and those making less than 29 thousand dollars annually would be exempted.  This is equivalent to an estimated two thousand four hundred dollars per month.  Currently, the tax threshold is at 24 thousand dollars per year or two thousand dollars per month.  

John Briceño, Prime Minister of Belize: “Our plan is to eventually be able to get rid of PAYE. It’s our goal. How long it will take us that’s depending on how fast the economy can grow and revenues can grow because if we reduce the tax we have to get it from somewhere else. So we hope that with growth to be able to replace it. So this is the first step. We took it up to $29,000 and by doing that so anybody that’s earning $29,000 and less than $29,000 will pay zero tax. And if done above $29,000 will pay. There was also an anomaly that the way the Barrow government set up the income tax is that let’s say you’re at a threshold lets say at $29,000 and you get a raise for say $100 to $29,100 for the year the tax regime that you jump into another bracket and then in many instances the tax you pay will eat up the raise that you were getting and that is happening especially in the tourism industry, I’m told I don’t know for sure but a lot of people in the tourism industry and in other industries are forced to pay that in cash because if the worker would say I will not take a pay raise because then I’m going to get less money at the end of the day. So again we made that adjustment so that whenever that happens the tax will never be more than the raise that you will get. So I think it’s exciting and we’re moving in the right direction. We expect that with the growth that we’re projecting the first two quarters of this year we had a 10% growth we believe that we’ll be able to offset those revenues. But you are right there is no such thing as a free lunch. If we give away something we’ll have to get it from somewhere else so we’re expecting that with the growth in the economy then we’ll be able to offset those losses.”