Photo credit: Loop PNG
According to the Internal Revenue Commission (IRC), all workers earning at least K673 per fortnight would have their tax bills lowered by K42 per fortnight.
Commissioner-general Sam Koim stated in a public notice that the Government recently authorized an amendment to the Income Tax (Salary or Wages Tax) (Rates) Act, temporarily raising the tax-free threshold for salary and wages tax (SWT) from K12,500 to K17,500.
Workers earning more than K12,500 per year will no longer be required to pay 22 toea for each kina over K12,500 but less than K17,500.
Because of the increased threshold, the 22t per kina tax is only paid after the yearly income surpasses K17,500. In fortnightly terms, this means that all workers earning at least K673 per fortnight will see a K42 reduction in their tax payment.
The dividend of K42 per fortnight is estimated to help more than 200,000 workers.
An additional 20,000 workers earning between K480 and K673 per fortnight will be exempt from paying income tax during this time.
People earning less than K480 per week pay no income tax, thus their tax obligations cannot be decreased.
The rise in the tax-free threshold is only in effect from tomorrow until December 31, 2022.
The tax-free threshold will reset to K12,500 on January 1, 2023.
Reference: The National (11 May 2022). “Govt raises tax threshold”.
