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Secretary Vele clarifies changes in housing taxes

The Secretary for Treasury, Dairi Vele, has called on media outlets to refer to fact over sensation in commentary on amendments to the taxable component of the housing benefits.

Secretary Vele said the facts are clear in the budget documents, that the only people affected by changes are those with more than K3,000 per week in accommodation cost.
“The amendment will not affect low-to-medium income accommodation rates,” Secretary Vele said.
“This means that families in the low-to-medium income tax bracket will have no additional tax liability.

“It cannot be stated firmly enough, that the policy is clear in maintaining the existing level of taxation for tax payers in the low-to-middle cost employer provided housing.
“There has been an increase in rates for the highest end of the market and will not affect ‘ordinary workers’ as been claimed.”

The Secretary said the overarching directive from the Prime Minister and the Treasurer in developing the 2017 budget was that it had to be fair and stimulate the economy.
“You do not stimulate economic activity by imposing costs on the workers and our growing middle class, you need to make it easier to stimulate further consumer spending.
“The changes were made to better reflect the current market rental values so the ordinary income earners can afford housing.

“This shifts the burden of these costs away from the lower and middle income brackets, towards higher income brackets where the higher earners are better able to absorb the costs.
“This was developed from the recommendations by the Tax Review Committee 2015.
“I call on commentators to seek clarification from Treasury or IRC before before self-promoting themselves through false news.”
The Secretary said the Treasury and IRC will now initiate a mechanism whereby concerns and clarifications can be provided to worried families through a Government website and a dedicated phone line. Media Statement
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