Barbadians are expected to feel some relief in their household budgets from as early as next month, the finance minister pledged on Monday, as he rolled out a package of personal tax cuts and credits aimed at tackling the squeeze from high living costs.
Ryan Straughn told the House of Assembly that for the 2026 income year, rates for personal income tax will be cut by one per cent to 11.5 per cent for individuals earning between $25 000 and $75 000, and to 27.5 per cent for those earning above $75 000.
He said: “Combined, these two measures return $26.1m annually to working Barbadians, placing more disposable income in the hands of the middle class while preserving the integrity of the progressive tax structure. We would have gone further, and it is our intention to do so, but the current global environment, marked by geopolitical conflict, supply chain disruption and rising inflation, demands that we proceed with discipline. Fiscal caution today is what protects our ability to deliver more for Barbadians tomorrow.”
Further, he outlined that for the 2025 income year, the reverse tax credit will increase from $1 300 to $1 700 for those people earning up to $25 000, and that there would be an expansion of the income eligibility for the credit from those earning $25 000 to $35 000 per annum.
“These persons will receive a reverse tax credit of $750. This will benefit another 17 221 persons at a cost of $12.9 million,” he said.
In addition, with effect from income year 2025, the income limit for the compensatory income credit will increase from $35 000 to $50 000, benefitting 18 415 taxpayers.
Straughn said: “The compensatory income credit helps ensure that lower- and middle-income earners retain more of their income to reduce tax liability. That means more money stays in the pockets of ordinary Barbadians. These enhanced credits will be available to taxpayers as they file during the next filing season in April 2026, in two weeks.”
Regarding pensioners, Straughn announced a one-year cost-of-living cash credit of $100 per month for those earning less than $50 000 per annum starting April 1.
“This will be paid through the National Insurance and Social Security Service, who will liaise with the Barbados Revenue Authority to confirm income levels. This monthly payment provides direct assistance to pensioners whose fixed incomes have been strained by rising prices. Persons may opt to receive the cash credit quarterly, semi-annually, or annually.”
Those eligible are pensioners who, as of April 1, are receiving contributory and non-contributory pension, survivors’ benefits, and retired public officers receiving pension payments from the Treasury.
The taxable allowance for pensioners will also see an increase from $50 000 to $75 000 with effect from the 2025 income year.
Acknowledging that some people had failed to make the appropriate number of contributions to receive a pension, Straughn said these, too, as well as individuals on welfare, would be eligible for the cost-of-living cash credit. (JB)
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