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Guyana’s minister of finance presents Budget


Kendy

Guyana’s minister of finance presents Budget
Dr Ashni Singh (GP)

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Georgetown – The Guyana government Wednesday presented a GUY$552.9 billion tax-free budget to Parliament providing funding for a series of sectors here as the country seeks to continue building on the 19.9 per cent economic growth achieved last year.

“It [budget] is fully financed with no new taxes,” Finance Minister Dr Ashni Singh said as he delivered the third budget in 18 months, telling legislators that the economic growth was due mainly to the oil and gas sector, with the non-oil sector growing at a rate of 4.6 per cent.

Singh said the economy is expected to grow by 47.5 per cent this year with the non-oil economy growing by 7.7 per cent.

The government also announced tax reductions in a bid to improve business competitiveness, promote local content and support job creation.

Regarding the importation of new motor trucks of any tonnage for transport of goods  and less than four years old, Singh announced the removal of the ten per cent excise tax as well as the 14 per cent value added tax (VAT).

He said in relation to the importation of new haulers for pulling containers or similar vehicles for pulling, the government is removing the 14 per cent VAT.

“New double-cab pickups below 2000 cc  will see the removal of the currently applicable 10 per cent excise tax altogether, while for new double-cab pickups between 2000 and 3000 cc there will be a reduction of the excise tax from 110 per cent to 75 per cent,” he said, noting that in relation to the importation of new single cab pickups below 3000 cc, the government will remove the currently applicable 10 per cent excise tax while reducing the cost of cranes, safety equipment, and oil spill equipment

“Still on the subject of improving the competitiveness of Guyanese businesses and enabling them to ramp up their equipment fleet, we will also remove the 14 per cent VAT on cranes, safety equipment, and oil spill response equipment, all as part of ensuring that as many Guyanese businesses as possible can equip themselves accordingly,”  Singh said.

Singh said that these measures will cost an estimated two billion dollars and will make an important difference in ensuring the competitiveness of Guyanese businesses, and thereby help create jobs.

He said that the government is to increase of old age pension from GUY$25 000 to GUY$28 000, saying this will place an additional GUY$2.3 billion of disposable income in the hands of 65 000 old age pensioners.

Public assistance is proposed to be increased from GUY$12 000 to GUY$14 000, benefitting 18 000 people and provide a further GUY$432M in disposable income to those individuals, Singh said announcing a series of other public assistance grants.

Delivering the fiscal package titled “Steadfast against all challenges, resolute in building our One Guyana,” Singh said the Irfaan Ali government is mindful of the severe challenges that continue to beset both the global and domestic economies, including the coronavirus (COVID-19) pandemic, climate change and the massive floods across the country this year.

He told legislators that the budget is geared at ensuring that the country’s “urgent developmental needs” are met in the shortest possible time, while still protecting the long term economic progress.

This is the first fiscal package that includes financing from the oil sector, through the use oil revenues in the Natural Resource Fund (NRF) and Singh said that administration has also tapped into a US$54 million package received from Norway, combined with investment income, to build two major drainage channels in Region Five and Six to provide significant flood-relief to the coast.

The funds from Norway have come through the landmark Guyana-Norway partnership under the Low Carbon Development Strategy (LCDS) Under the partnership, Norway signed a deal for USS$250 million, once Guyana’s deforestation rates remain intact.

In his presentation, Singh said the gold mining subsector represented 8.8 per cent of the country’s economic output last year and this sector is expected to contribute significantly to the economy against this year.

“Significant growth can be expected from the subsector in 2022, with gold declaration envisaged to continue to be dominated by small and medium scale producers,” Singh said, adding that these producers are operating 1,054 small-scale mines and 25-medium scale mines.

Gold output was the third largest non-oil sector of the local economy in 2021, accounting for more than 60 per cent the country’s total non-oil export earnings. Singh said that the country’s total export earnings was more than four billion dollars last year.

The government also announced that it is providing an additional six billion dollars to support the Guyana Sugar Corporation’s (GuySuCo’s) ongoing investment in field and factory operations as it seeks to turn around the industry with the reopening of several estates this year.

The new funds brings total budgetary support to GUY$17 billion with Singh announcing that the government will continue to consider the possibility of engaging private investor interest also in some of the estates.

“Looking ahead at 2022, strategic investments will be made at Albion, Blairmont, and Uitvlugt to upgrade and mechanise where appropriate the field operations, and expand packaging capabilities to produce more value-added products for our domestic and international markets,” Singh said, adding that the government’s commitment to the sugar industry remains.

The government is providing a total of GUY$73.2 billion for the health sector with GUY $12.4 billion to be spent on developing six new hospitals across the country. (CMC)