“In the year 2000, income taxes paid by companies amounted to some $8B and by fiscal year 2010 this amount had grown to $21.4 billion, a 159 % increase,” says Chairman of the Private Sector Commission, Ramesh Dookhoo.
Policy changes and the prominence given to the private sector over the last 20 years have allowed this growth. He stated that, “The policy changes in Guyana over the years have been focused and targeted to facilitate this current and unprecedented level of confidence that the private sector has in exploiting business opportunities in Guyana.”
Dookhoo made those remarks yesterday at the 19th General Annual Meeting of the Commission.
He emphasised that like the theme, “The Re-emergence of a Strong Private Sector in Guyana,” the sector has re-emerged and is vibrant, and added that, “The private sector has re-emerged from its relative lack of importance in the economy of the past and is now definitively established as the true engine of growth in Guyana. With increasing levels of local and foreign investment it is also growing exponentially and has increasingly assumed a dominant position in the economy.”
Regulatory and Incentive Framework
“We made progress over the last years and more recently in advancing the regulatory and incentive framework for business to grow in Guyana. This framework was and remains the premise for business to flourish,” Dookhoo stated. Some of these regulations and incentive frameworks include Fiscal Amendments Act and VAT.”
He noted that the Fiscal Amendments Act was passed owing to the business community’s concerns that the playing field was not level for incentives and there was no legal framework clearly outlining what level and type of incentives were allotted to different industries and sectors.
In addition in 2004, the Investment Act was passed and it provides legal protection for investment, both local and foreign, to guarantee the right including to divest land, and proper repatriations of dividends.
He emphasised that, “The introduction of VAT brought greater simplicity in sales tax. Recently, in Budget 2011, after tireless ground work and persistent advocacy by the Private Sector Commission, corporate taxes were reduced: from 35 to 30% for non-commercial companies, and for commercial companies from 45% to 40%.”
It was noted that the business community presently enjoys macro-economic stability.
The Chairman pointed out that,”Guyana has continued to receive commendation from the International Monetary Fund for prudent macro-economic policies. Over 1999 to 2010 inflation has averaged 6% and the exchange rate has remained broadly stable.”
“The issues of macroeconomic stability and political stability are in some senses inextricably linked since the macro-economic framework is managed by the government of the day and political stability is in large part a consequence in how we as a democratic society choose our government,” Dookhoo noted.
He asserted that the commission engaged the three declared presidential candidates for the national elections, where they outlined their policy positions which are expected to be reflected in their campaign manifestos.
It was noted that the first change required to accelerate private business is the political culture of Guyana.
“As you all know, perceived political and ethnic schisms in this country have been the concerns of foreign investors for some time. To put it in technical language, this political environment gives Guyana “a high country risk rating,” he stated.
National Competitiveness Strategy
In 2006, the role of the commission was expanded when it entered into a partnership with government to implement the National Competitiveness Strategy. This partnership has led to the formation of several Public-Private dialogue bodies, which allow the PSC to participate as equal partners of government in prescribing measures to improve the competitiveness of the economy.
“The measures are all geared at facilitating and enhancing the role of the private sector in the economy of the country. While the private sector has grown rapidly and now dominates the economy there is much room for its further growth and the National Competitiveness Strategy provides the medium through which the sector can further catalyze the growth of the economy,” Dookhoo stated.
He pointed to the fact that, “We need to remind ourselves that the range of investors with growing faith and presence in Guyana, include conglomerates from China, Russia, Canada, Jamaica-Digicel, The United States of America, Mexico and others.”
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