…Value Added and Excise Taxes to rake in some $41.3B this year
By Gary Eleazar
In outlining the largest budgetary expenditure in Guyana’s history, Finance Minister Dr Ashni Singh told the nation that the bulk of the money will be derived from taxes, with the remainder coming from exports to a volatile international market.
Dr Singh told the House that the nation’s current revenue is targeted at $90.3B, which is a significant increase over the previous years, with a contribution of $86.4 billion from GRA’s tax revenue.
Customs and trade taxes are projected to collect $7.8B, representing a 3.7 per cent increase over last year; internal revenue, $37.4B and Value-Added and Excise Taxes to rake in some $41.3B, which is some 11.2 percent over 2008.
In 2007, when the tax was first announced to be revenue-neutral, it was expected to rake in $24B but yielded some 36M. The following year yielded another significant increase.
The minister, however, said that the increase for 2009 is based on the restoration of the excise tax on fuel, which was removed last year to keep the price at a minimal rate.
Non-tax revenue is geared to rake in some $3.9B, mainly on account of the Bank of Guyana’s net income transfers.
Total receipts of the public enterprises is targeted to increase to $110.7B, with taxes and other transfers projected to rise to $1.1B.
According to the minister, the sugar industry has to raise its production levels and, at the same time, reduce its production costs; and the factory is now expected to be fully operational by the middle of the year, and is targeted to reach production levels of 110,000 tonnes of sugar within three years.
He noted that funds totalling $1.2B are provided in the budget to commence construction of the Enmore Packaging Plant to supplement the packaging facility at Blairmont, and a prospectus to solicit private sector investment in a sugar refinery will be prepared and launched.
In addition, US$24M of principal and interest payments owed by GuySuCo will be deferred, which he said would otherwise have become payable by GuySuCo during the next three years under the Skeldon onlending agreements.
“This is especially necessary given the impact of the third step of cuts in the European price for our sugar, which takes effect later this year.”
In the rice sector, Dr Singh noted, there will be an effort to sustain cultivation levels and improve seed, whilst introducing new and more resilient varieties.
To this end, the minister pointed out, a new seed facility is expected to be constructed at No. 56 Village aimed at decentralising seed production from Burma and facilitating easier access to improved seed stock by farmers.
Over $40M, according to Dr Singh, will be invested at the Burma complex to procure laboratory and specialised equipment, in order to improve the diagnostic capabilities of the industry.
He added that there will be a training programme for over 1,500 farmers, to be conducted countrywide.
A sum of $1.1B has been allocated to complement the expansion and development of non-traditional agricultural subsectors.
The minister noted that special emphasis will be placed on institutional strengthening, training, research and development, and increasing levels of production.
He noted that the Agriculture Export Diversification Programme will provide institutional support to the National Dairy Development Programme (NDDP) and the National Agricultural Research Institute (NARI), including through the construction of new laboratories at NDDP and rehabilitation of the seed facility at NARI.
A budget allocation of $257M will also be utilized for conducting training and research, market identification, improving packaging of agriculture products and feasibility studies for selected agricultural products.
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