Parliament has approved a resolution to increase the concessionary loan amount which is paid to employees in certain financial institutions.
The Provisional Collection of Tax (Income Tax) (Confirmation) Resolution was moved by Minister of Finance and Planning, Dr Peter Phillips.
He noted that the change became necessary in order for benefits which are granted to workers in the financial institutions to keep pace with current economic realities.
The concessionary loan can be used for purchasing a house for owner’s occupancy, purchasing a motor vehicle or land, or for education, training and emergency needs.
According to the Finance Minister, due to the inflationary effects of the rising cost of living over time, the concessionary loan policy has not kept pace with the current realities in terms of the interest rate levels and the threshold amount.
He added that in respect of the threshold of $1.5 million, the sum was not reflective of the current cost associated with the stipulated purposes.
The Resolution has raised the concessionary loan threshold from the current $1.5 million-$4.5 million.
In addition, the interest rate for these concessionary loans has been reduced from 14 per cent to nine per cent per annum.
