Finance Minister unveils $221B Budget
· Salaries move from $39, 540 to $50, 000 ·
Old age pension increased from $13, 125 to $17, 000 ·
Gold miners exempted from paying custom duties on fuel, 10 other items ·
Berbice Bridge toll for passenger cars, buses reduced from $2, 200 to 1900 ·
Uniform Voucher increased from $1,500 to $2,000 ·
Sausages and 21 other items to attract zero VAT
By Kiana Wilburg
Finance Minister, Winston Jordan (left) being congratulated by Foreign Affairs Minister, Carl Greenidge at the end of his budget speech
Closing in on nearly four hours, Finance Minister Winston Jordan delivered his maiden budget which amounted to $221B for the last four months. With the exception of the reduction of Value Added Tax (VAT), the APNU+AFC government delivered on the remainder of all of its economic promises to the Guyanese populace and then some. Salaries and old age pensions were significantly increased, the Berbice Bridge toll was reduced and gold miners finally got their promised tax relief in some regard. Eager to unveil what the government has been planning since it assumed office, Jordan arrived at the National Assembly at 1:30 pm way before the scheduled time – to prepare mentally it seemed, for the main event of the day. Though the People’s Progressive Party/Civic (PPP/C) continues to leave its seats on the western side of the House vacant, House Speaker Dr. Barton Scotland noted that the opposition party submitted its names for its parliamentary candidates. Before revealing the goodies of what was described by many as one of the most comprehensive and detailed budgets in recent times, Jordan chronicled the events which led to the historic occasion for the fledgling government yesterday. As he addressed the Members of Parliament and the Speaker of the House, he said, “As will be recalled, the Guyanese people came out in their thousands; they were determined to bring an end to the morass, hopelessness and helplessness that had enveloped our country. They were determined to bring an end to a Government that had wreaked havoc on our society – sapping it of its energy and stripping it of its dignity and dynamism.” “And so, Mr. Speaker, after five anxious days, during which the Guyanese people agonized as they waited, the results of the General and Regional Elections were finally announced on May 16, 2015. The coalition of the APNU+AFC, which had earlier sealed a formal relationship to fight the PPP/C on a joint platform, was declared the winner. The Guyanese people finally exhaled after holding their breath against the stench of corruption, nepotism and discrimination that had assailed their olfactory sense. For too long, our people had to suffer under a Government that cared less about them and more about their friends and associates.” On this premise, the Finance Minister noted that the time has come for “A Fresh Approach to the Good Life in a Green Economy” which happens to be the theme of the 2015 Budget. But before divulging the details of the allocations for various sectors, Jordan felt that it was important for the nation to understand that when the government took office it was hit with various problems, particularly as it relates to two of the country’s biggest revenue earners, rice and sugar. He said that this was compounded by the threat by Venezuela for two-thirds of Guyana’s territory. After this, the Finance Minister then revealed what the APNU+AFC’s government’s vision for a better Guyana looks like when translated into budget form. Though VAT will not be reduced entirely or across the board until a review on its feasibility and impact is completed, the Finance Minister revealed that a number of food items will attract zero VAT. These are: yogurt, cereals, fresh carrots, milo and ovaltine, nestum, mustard and mayonnaise, locally-produced fruit juice, locally-made chowmein, vinegar, locally-made uncooked pasta, ketchup, chicken sausages in packets, locally-produced Chinese sauce, baking powder, household cleaning agents, rolls of paper towel, liquid detergent, and computer printers for non commercial use. Jordan said, “It is our fervent hope that retailers will pass on the benefit from the removal of VAT from these items to the consumer, through the lowering of their prices. The estimated loss of revenue is $680 million.” As for Tax Exemptions to Medium and Small Scale Miners – another promise on APNU+AFC’s Action Plan – the Finance Minister said that eligible gold miners will be exempted from the payment of custom duties on fuel, matting, ATVs, jack hammer drills, flex hoses, expanding metals, pumps, pump housing, impellers, shafts and engines. He said that pursuant to the Customs Duties (Amendment) (No.1) Order 2004, the Government will enter into a new agreement with the Guyana Geology and Mines Commission (GGMC) and the Guyana Gold and Diamond Miners’ Association (GGDMA) to give effect to the grant of these tax exemptions. The Finance Minister also spoke to the various increases for public servants, noting that public servants who worked for $39,540 will benefit from a significant salary bump to $50,000 (see related story on page 18). In keeping with the item that falls number one on the APNU+AFC’s action plan, Jordan said that with effect from September 1, 2015, the toll for passenger cars and buses will be reduced from $2,200 to $1,900, a 13.6 percent decline. At the same time, the toll for all other types of vehicles will be reduced by 10 percent. Jordan noted that this is the first of a phased reduction in the Berbice Bridge Toll. As for the fifth item on its action plan, the Finance Minister said that government is indeed cognizant of the need to end the current discriminatory approach to accessing old age pension benefits. He then declared that from September 1, every pensioner will benefit equally from a monthly pension of $17,000, a 30 percent increase on the present amount of $13,125. Homeowners now have another reason to smile as Jordan spoke to Mortgage Interest Relief yesterday. He proposed the repeal of Section 8 of the Regulations of the Income Tax Act Cap. 81:01 and the amendment to Section 3 of the Regulations. This will now pave the way for Mortgage Interest Relief to be provided to homeowners through a deduction of the amount of interest paid to a financial institution against their chargeable income. Jordan also proposed for the amendment to the Income Tax Act Cap. 81:01. With this amendment, workers will no longer be paying income tax on their national insurance contributions. Thus, in addition to the tax threshold, the Commissioner General must deduct the NIS contributions of the worker before determining his chargeable income. Jordan said that this will result in a loss of revenue of about $1.3 billion annually but, importantly, it would result in a net increase in the disposable income of all workers. He said that this measure will be effective from year of assessment, 2016. The Finance Minister also announced that $11M has been allocated to Trade Unions in an effort to strengthen their capacity to better represent the rights of workers. However, Jordan certainly didn’t forget to include something special to help parents. He noted that government has agreed to increase the uniform allowance voucher from $1,500 to $2,000. As for allocations to various sectors, $21B was awarded to the security sector to strengthen and improve national security services while $33B has been allocated to the education ministry. Jordan noted that $1.7B was budgeted for the procurement of 9,609 laptops which are to be distributed to educators, students, institutions of learning and community-based organizations. The health sector was allocated 10.5 percent of the national budget which amounts to $23.2B. Over $133.1M will be spent on the expansion of the Georgetown Public Hospital. Given government’s commitment to improving the telecommunications sector, he said that $937M was allocated to the E-Government network over which access to many of the services envisaged shall be provided. Additionally, $234M was set aside for support cultural institutions with Theatre Guild of Guyana benefitting from an increased subvention. To the end of his presentation, the Finance Minister said, “In just about three months in office, we, in this Coalition Government, have been tested, by both domestic and international issues, and by an uncooperative opposition still piqued at losing the recent General and Regional Elections.” “We have made missteps, but generally we have proven that we have the mettle to confront the problems and challenges thrown at us. After all, that is part of what we were elected to do – provide strategic, astute and accountable leadership in pursuit of the common good. This is what we commit to do: continue to govern in the interest of all Guyanese.” At the conclusion of what was perhaps a record-breaking budget presentation, Jordan received hearty applause and congratulations from his colleagues. He later told Kaieteur News that he was, “happy, proud and relieved.”
