Several areas to cushion the impact of a Minimum Wage increase on businesses are being explored, including increasing payroll tax exemptions, Premier and Minister of Finance Dr the Honourable Matalio D. Wheatley (R7) has said. Photo: VINO

The Ministry of Financial Services, Economic Development, and Digital Transformation has announced that the increase in the minimum wage for the Virgin Islands (VI) which was scheduled to take effect from November 30, 2024, has been postponed. Photo: Government of the Virgin Islands

Increasing the payroll tax exemption is being looked at as the government continues to deliberate on implementing the minimum wage increase in the Territory. Photo: Internet Source

This is according to Premier and Minister of Finance Dr the Honourable Natalio D. Wheatley (R7) while addressing the issue of Minimum Wage during his first press conference for 2025 today, Thursday, January 23, 2025.

The Wheatley government had announced an increase in the Minimum Wage to $8.50 per hour effective November 30, 2024, however, it was subsequently postponed.

'I wanted to take another look'

“We had a change in minister. Of course, when I came in as minister, I wanted to take another look at the issue of the Minimum Wage. 

Then Minister for Financial Services, Labour and Trade Hon Lorna G. Smith, OBE, (AL) led the charge for the increase in the Minimum Wage. Hon Smith was removed from Premier Wheatley’s Cabinet of Ministers in October 2024. 

“So we are just about to conclude the deliberations we’re having on that and we’ll be able to say something more to the public,” Dr Wheatley said. 

Payroll tax exemption may be increased- Premier

Dr Wheatley said he did apologise to the public for the delay in implementing the Minimum Wage increase adding, “I do reiterate that apology again, of course, the timing was not ideal.”

He explained that when the Minimum Wage is increased as significantly as it was, there is always the potential for those costs to be passed on to the consumer.

“I wanted to ensure we had the proper mechanism in place to be able to deal with potential increases in prices including…that basket of goods,” he stated.

The Premier said the government is also exploring “sharing the burden with the businesses so that means potentially increasing the payroll exemption from [ten thousand dollars]; we are looking potentially to [fifteen thousand dollars],” Dr Wheatley revealed.

Currently, each employee in the Virgin Islands is entitled to an annual tax exemption of the first $10,000.00 earned remuneration.

It was in April 2024, that Opposition Leader Hon Ronnie W. Skelton (AL) recommended that employees earning less than $23,000.00 annually be given an annual payroll tax exemption of the first $15,000.00 earned.

Meanwhile, Premier Wheatley also reminded that a phased approach will also be used for the implementation of a Minimum Wage increase.

Dr Wheatley said he would be speaking with the public “very shortly” once deliberations have concluded.