SVG: Salary increase agreed to with unions is fiscally sustainable

"by" Ernesto Cooke
Published : Post Last Updated :

The government of St. Vincent and the Grenadines and the Labour Movement have agreed to an increase in salaries for central government employees for the years 2023, 2024 and 2025.

The salary increases agreed upon will also be applicable to non-established wage earners and pensioners. Additionally, the government committed to implementing, in the 2023 fiscal year, personal income tax relief measures in keeping with the longstanding stated policy to reduce taxes paid by workers.

The salary enhancements agreed with the Unions are fiscally sustainable, in that it permits the government to satisfy the wage rule under our Fiscal Responsibility Framework. At that same time as it provides a reasonable increase in disposable income of the public servant which the economic circumstances permit.

The entire salary enhancement package comprises the following:

  1. A seven (7) percent increase in salaries, wages and pensions over the three-year period is as follows:
    1. 2023 FY 2.5%;
    2. 2024 FY 2.0%.
    3. 2025 FY 2.5%
  2. An increase in the standard deduction for Personal Income Tax from $20,000 to $22,000; and
  3. A reduction of the top marginal rate for Personal Income Tax from 30% to 28%.

The increase in Salaries, Wages and Pensions package is estimated to cost the government $25.89 million over the three-year period. The tax relief measures are estimated to cost $23.89 million. In total, the salary enhancement package is estimated to cost $51.79 million over the period 2023 to 2025.

 

 

 

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