Feb 13, 2021 News
– Old age pension increase
– $15,000 voucher per school child
– 0% VAT on food items and more…
Kaieteur News – Guyana’s largest budget to date totalling $383.1 billion was yesterday presented to the National Assembly under the theme “A Path To Recovery, Economic Dynamism and Resilience.”
The four-hour long presentation was made by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, with the 2021 budget being financed without any new tax measures.
Among the wide range of public investment projects and initiatives announced, were several measures aimed at bringing relief to the thousands of Guyanese who were hit financially when the COVID-19 pandemic crippled the economy.
According to Dr. Singh, those measures also deliver targeted interventions aimed at specific sectors and spheres of activity that are particularly important both to households and businesses.
During his presentation, Dr. Singh announced the restoration of food items and other basic household necessities to zero rated value added tax (VAT) status. These items include basic wheaten flour, basic breads, oats, unflavored cracker biscuits, cooking oil, locally produced bed sheets and pillowcases and toothbrushes, etc.
Water, an essential aspect to human life also received a 5% reduction targeting all levels of consumers.
And with construction being a key sector and contributor to Guyana’s economic development, Government also announced zero rated VAT status for stone imported for construction and housing from CARICOM, locally produced pre-stressed concrete piles, locally fabricated mild steel beams for building construction along with locally manufactured roofing and PVC products for building construction.
According to Dr. Singh, Government will continue to monitor the cost of basic construction materials, such as cement and steel, and examine the possibility of applying relevant taxes to cushion the impact of steep price escalation. As another boost, Government also announced the reduction of duty on industrial grade cement from 15% to 5%.
Added to that, Government also announced restoration of zero-rated VAT status in relation to goods when imported and works and services purchased by a Budget Agency.
While Government had announced last year, an increase from $8 million to $10 million in the ceiling on low-income housing loans to obtain through commercial banks under the low income housing loans programme, 2021 will see that ceiling being raised to $12 million, to make housing loans more affordable to borrowers within that range.
“We will also, in due course examine the appropriateness of extending the programme to include other financial institutions such as insurance companies,” Dr. Ashni Singh continued.
In addition to that measure, Government also announced an increase in the housing loan ceiling at the New Building Society from $12 million to $15 million.
Government also announced the removal of VAT on data for residential and individual use.
Dr. Ashni Singh highlighted as well that in the 2020 budget, VAT was removed from ATVs for mining, forestry, agriculture and manufacturing. To further reduce the cost of transportation for hinterland communities and operators, the Government moved to remove the duty on ATVs for use in the hinterland.
As it relates to Guyana’s school aged children, Government announced the introduction of a cash grant valuing $15,000 per child attending the nursery, primary and secondary in the public school system.
Guyana’s elderly will also see a pension increase from $20,500 to $25,000, which according to the Minister will benefit over 60,000 persons and put an additional $4 billion of disposable income in their hands.
Public Assistance payment was also raised from $9,000 to $12,000 providing an additional $500 million in disposable income to these individuals.
And finally, on the cards for budget measures, Government announced that the sale of assets that were owned for more than 25 years will not attract capital gains tax on their disposal.
In totality, budget measures for 2021 amounted to $50 billion factoring in the $40 billion expended on budget measures for 2020.
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