Latest update March 29th, 2024 12:59 AM
Jan 21, 2017 Features / Columnists, Peeping Tom
Things are getting tight in the economy. Prices are increasing. Part of that increase is seasonal, but the major part is being caused because of the imposition of VAT on electricity and water.
It seems to have bypassed the government’s attention that any increase on VAT which has to be paid by the business community is going to be passed on to the consumers.
Electricity costs now attract VAT for those consuming over $10,000 per month. This means that most businesses are going to increase prices. In fact, the prices have already begun to increase, especially for services that use electricity and water.
The cost of getting fitter has increased. The fees, at certain gyms, have increased already, even though the VAT does not kick in until February. Prices for beverages have seen an increase. The cost of food at Chinese restaurants has also seen a slight increase – always a sign of problems in the economy. Prices of greens have skyrocketed, but this has to do with the weather and crop losses due to the weather rather than with the Budget. Gasoline which spiked by $12 per litre recently has seen an additional increase of $8 per litre, making the overall increase $20 per litre or about 1% increase on a tank of gasoline. Kerosene prices, the small man’s fuel, have also increased.
There are indications that there will be a second wave of increases in the prices of imported items. The persistent foreign currency shortage will inevitably push the foreign exchange even higher than it increased this past week. Importers will have to pay more for foreign currency to import goods and they will pass this on.
Increases in the foreign exchange rates were always likely. When you pass a Budget measure which allows GRA to garnish funds from your accounts, people will get sacred. They will draw their monies out of the bank and send it overseas. They have to buy up foreign exchange for that purpose. When persons with property read about compulsory acquisitions for public purposes, when they see how the government operated with Red House, they are not going to take chances with their property. They will put it on the market and bail out of Guyana.
Rice farmers in MMA are not going to go back to crop if they have to pay draconian increases in rates and fees. They will not plant to make a loss. And if they do not plant, there is less rice to export and less foreign exchange on the market, which will further increase the exchange rate.
There are concerns within the business community that people are holding back on spending. That may be the rich people, but for the vast majority of Guyanese, household budgeting is an exact science. Guyanese housewives in the lower income and middle income classes, budget to the dollar.
Each month when they get their money, either from work or their husbands, or both, they have a list. A certain sum is allocated for food, a fixed sum for rent, a certain amount for transportation; they budget for the allowances for their children. Electricity is a must, and so a fixed sum is set aside to pay that each month. There is little or nothing left for entertainment, but the lower income families may treat themselves to a fast food meal once every few months. This is life for the low income earners in Guyana.
If you are poor, you live on a day-to-day basis. You spend on the basis of how you get money each day. Every day is a hustle. You make a few dollars and you spend it. If you do not get any work on a day, you do with what you have or beg a neighbour or friend.
Poor people do not starve in Guyana; they bear their chafe. They help one another. If your neighbour wants a pint of rice and onion, you will help out, because one day it may be your turn too to beg.
Things were already tight with household budgets prior to the National Budget. But now things are tighter. Housewives in Guyana deserve the Nobel Prize for economization. They will stretch a dollar so far that you would believe it is made of elastic. But how far will the dollar go when there are fewer dollars to stretch?
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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