In a move expected to ease the financial burden on parents, President Dr. Irfaan Ali has announced a new income tax measure that will come into effect in 2025, allowing fathers and/or mothers to claim an additional $10,000 in tax deductions per month for each child.
Speaking at a special sitting of Parliament on Thursday, President Ali outlined the new measure, saying it aims to enhance the disposable income of families by reducing the amount of income tax they are required to pay.
The initiative will allow one parent to claim a $10,000 tax deduction for every child they have.
“This new income tax-deductible will mean that for every child a parent has, they are entitled to an additional $10,000 in tax-free income per month,” the President explained.
“For example, if you have two children, your monthly income tax threshold will increase by $20,000, and for three children, it will rise by $30,000.”
With the current income tax threshold set at $100,000, this new measure means that a parent earning $120,000 per month with two children, for instance, will not be subject to any income tax, as their tax-free threshold will increase to $120,000.
Vice President Dr. Bharrat Jagdeo, speaking at a subsequent press conference, elaborated further on how the new tax deduction would work in practice.
“This deduction will be applied on a monthly basis, as taxes are deducted monthly,” he said.
For example, if someone is earning $100,000 a month and has two children, their tax-free income threshold will now increase to $120,000. This means they won’t have to pay any taxes if their salary remains at $120,000 or less.
The initiative, set to take effect next year, is seen as a crucial step towards increasing the disposable income of parents and families across the country, while also contributing to the broader goal of reducing the tax burden on working individuals.
This new measure is expected to benefit thousands of Guyanese families, helping them meet the rising costs of living while simultaneously boosting economic activity by leaving more money in the pockets of the country’s workforce.
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