Feb 04, 2016 News
…but wants clarity on new tax measures, Amaila Falls hydro project
The Private Sector Commission has congratulated Government and the Minister of Finance for the recently presented $230B national budget. The business body said that the budget will provide a significant stimulus to the economy as it recovers from a sluggish 2015.
“The PSC believes that Budget 2016 will generate growth. It is happy about the planned expenditure on infrastructure, in particular the $2bn that will be spent on hinterland airstrips. This will improve connectivity with the hinterland and allow for access to markets in the city and beyond by our producers in those regions,” the body said in a statement yesterday.
The significant sums allocated for education, health, public security and agriculture reveal that the focus of the government is on what is needed by the country and for the good of the people.
The advocacy body also argued for the Amaila Falls Hydroelectricity project which is in limbo.
“The PSC is pleased that the Amaila Falls Hydroelectricity project is being studied again and would urge the government to see this project through since it would have untold benefits to business and to all consumers of energy. The Private Sector Commission is also pleased about the plans for a new Demerara Harbour Bridge and the East Bank to East Coast bypass road.”
PSC urged also that public servants will soon receive their salary increases and that these will be substantial since, not only is this needed by the persons themselves, but the resultant spending will help the economy to recover.
“One of the recommendations of the Private Sector Commission was comprehensive reform of corporate taxes and PAYE (Pay As You Earn) tax. We are disappointed that this has not found favour at this time but we understand that such reform may have to await the findings of the Tax Reform Committee.”
PSC welcomed the increase in the tax threshold which it felt should have been higher to provide relief to low income earners.
“The Commission is also pleased that there was no reduction in the rate of the Value Added Tax. We are also happy that packaging materials have been made exempt from VAT and that tax refunds can now be applied across the board. The increases in gun licence fees are also fair and will boost government revenue but we are concerned about the impact on indigenous people who rely on shotguns for their livelihood.”
One of the concerns of the Commission is the planned early implementation of the requirement to provide compliance certificates in order to obtain licences but there needs to be some clarification of the impact of this.
“We feel that this measure, while being a good way to ensure compliance, should have been implemented at least a year after the date of its announcement to give persons time to get their taxes in order. The capacity of the Guyana Revenue Authority is paramount to the smooth implementation of this measure and we do not believe that the agency is currently capable of handling the expected thousands of persons who will be seeking in a short time to regularize their status as taxpayers.”
With respect to the ban on vehicles older than eight years, PSC said that the introduction of bans has a negative connotation. It seems unnecessary at this time and should be seriously reviewed and reconsidered. This is likely to place undue pressure on low and middle income persons.
“While being generally satisfied with Budget 2016, the Private Sector Commission wishes to urge the government to ensure that all the provisions of the budget are implemented and the allocated sums are spent since approximately 60% of the economy relies on government spending. Also crucial to a vibrant economy is investor confidence. Too many investors have been adopting a ‘wait and see’ attitude and we feel that this budget will restore that confidence and stimulate investment.”
The Parliamentary Opposition- the People’s Progressive Party- has described the budget as being unimaginative, anti-poor and anti-progress.
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