The first increase of $100,000 in the income tax threshold announced by the Government last month takes effect today.

During her contribution to the 2025/2026 budget debate in Parliament on March 11, Finance Minister Fayval Williams said the threshold will gradually increase from $1.7 million to $2 million.

She said the threshold will be increased in three tranches, the first being $1.8 million.

While many Jamaicans welcomed this news, some tax experts warned that the new measure could result in challenges.

Tax company PWC Jamaica, in a review of the budget published on March 12, explained that income tax is imposed by reference to a calendar year of assessment.

It said administratively, increasing the threshold effective April 1, creates greater challenges for employers who are then required to make mid-year adjustments to payroll systems.

It added that taxpayers filing returns will be required to work out composite annual tax-free thresholds for the year.

However, President of the Jamaica Employers’ Federation, Wayne Chen does not see this as a major issue.

He told IRIE FM News that while businesses will have to do some extra work, the advantage is that there will be some sort of tax relief.