-but stresses on shortcomings of Budget 2018
After conducting a quick review of Budget 2018, the Georgetown Chamber of Commerce and Industry (GCCI) noted recently that it was pleased with the reversal of several tax measures.
In this regard, it highlighted the removal of Value Added Tax (VAT) on education, the reduction in the Tributors’ Tax from 20 % to 10 % and the exemption of VAT on the supply of logs and rough lumber to the forestry sector.
GCCI also said that it views the Minister’s consideration and incorporation of the measures as particularly encouraging, and hopes that this dialogue can extend into the future and other areas of policy-making.
Be that as it may, GCCI noted that there were several shortcomings in Budget 2018. In this regard, the Chamber said that the budget did not provide a clear direction on an incentive regime for the private sector, apart from the Investment Act and Aid of Industry Act.
In this regard, the Chamber said it is displeased that the fiscal policy initiatives detailed in the budget did not provide stimulus to some main sectors of the economy, and particularly, that there has been no reduction to the corporate income taxation rate, personal income tax rate, or a rising of the tax threshold.
Additionally, the GCCI said it was hopeful that a clear plan would have been articulated in the area of job creation, investments and/or, facilitation of job-creating investments. Also worrisome to the GCCI is the fact that there was no elaboration of a strategy to absorb workers who will be displaced by government’s attempts at closing some sugar estates.
GCCI said that the government’s efforts to address the economic and social malaise stemming from this divestment were reduced to three sentences in a paragraph. This, the Chamber said, is a great cause for concern, given the industry’s importance and material impact on the economic livelihood of many communities.
GCCI said, “Furthermore, it was anticipated by the Chamber that there would have been some elaboration regarding the Oil and Gas Sector and the expected role and recent developments of the Sovereign Wealth Fund (SWF), especially when considering the importance of the SWF to the creation and promotion of a resilient economy.”
It continued, “This becomes more worrying as Guyana moves closer to the production of oil in 2020 and remains, by the Minister’s own admission, vulnerable to external shocks and fluctuations in international commodity prices.”
When taking this vulnerability into consideration, the Chamber said it expected some emphasis to be placed on the promotion of the agriculture sector, particularly through a suitable incentive regime.
The GCCI said that it looks forward to copies of the National Estimates, where it will do further analysis into the Government’s fiscal policy for 2018 and the other dimensions of the macroeconomic performance.
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