The new tax law that was approved recently by Nitijela will not go into force for at least four-to-five months from now.
Although Public Law 2024-14 Income Tax Amendment was signed and certified by Speaker Brenson Wase and Clerk Moreañ Watak on October 8, the tax change that affects withholding tax isn’t likely to take effect before about March or April, according to Finance Minister David Paul, the proponent of the legislation.
The legislation itself notes there will be a seven-month period before the law is implemented from the “effective date,” which is October 8.
Marshall Islands Chamber of Commerce President Randy Sylvester told Chamber members last week that “the new law is not yet in effect as the government is still making the forms/tax tables for the new rates.”
There is also speculation that there may be further amendments during Nitijela’s January session to the already adopted amendment.
The new tax law provides that those earning up to $8,320 pay no income tax. Those earning from $8,321 to $15,600 are to pay eight percent tax; from $15,601 to $25,999 the tax rate is 12 percent; and above $26,000 the tax level is 16 percent. The zero withholding tax on low income earners and the 16 percent rate are the primary new additions to withholding taxes.