Jan 28, 2022 News
Kaieteur News – In its 2022 Budget, the People’s Progressive Party government has suggested a Farmers Market Initiative, among others, which it hopes will help to cushion the cost of living.
Finance Minister, Dr. Ashni Singh told the National Assembly on Wednesday that, “we recognise the fact that there has been some upward movement in the prices at the marketplace for a number of food items. But, we also observe that the extent of the upward price movement at the marketplace is not reflected in similar price movement at the farm gate”.
He added that the increased prices reflect a number of factors, including transportation cost and multiple layers of handling and reselling from farm to final retail. In this regard, Dr. Singh said the government will be arranging monthly farmers markets at locations to be specified in East Berbice, East Coast Demerara, Georgetown, East Bank Demerara, and West Coast Demerara in the first instance, with the possibility of extending to other locations depending on the initial experience.
“This will help our farmers find ready markets for their produce, and help consumers benefit from the price advantage of buying directly from the farmer,” the Finance Minister reasoned.
Another measure which government has suggested to further lower the inflation rate is to adjust the freight costs. He said, “It would be recalled that we implemented in August 2021 an adjustment to the freight cost component in the CIF value used for calculation of import taxes, rolling back freight costs to pre-pandemic levels. This had the effect of reducing the import duties, excise taxes, and VAT charged on imported items”.
This measure was initially due to expire on January 31, 2021; however, the Finance Minister announced that the measure will be extended onto December 31, 2022. This measure is expected to cost in the order of $6 billion in 2022.
Additionally, the Minister pointed out that the cost of fuel will be reduced in a bid to reduce the cost of living. He told the National Assembly that the Government has established a mechanism whereby the excise tax on fuel is lowered when the world market prices for fuel increases. This mechanism was used twice in 2021 to lower the excise tax rate on gasoline and diesel from 50 to 35 and then from 35 to 20 percent. In this regard, he said, “I am pleased to announce that utilising the same established mechanism, we will be lowering the excise tax rate further on gasoline and diesel from 20 percent to 10 percent, with immediate effect”.
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