Representatives of labour, the private sector and the opposition have expressed grave disappointment at the lack of consultation and mention of serious issues facing the country at the moment such as the casino legislation and Value Added Tax (VAT) in the 2007 national budget.
General Secretary of the Guyana Trades Union Congress (GTUC) Lincoln Lewis, financial commentator and member of the Georgetown Chamber of Commerce and Industry Christopher Ram and Raphael Trotman of the Alliance For Change expressed these views having reviewed the budget presented by Finance Minister Dr Ashni Singh on Friday.
Lewis and Ram both made reference to the issue of consultation noting that in the preparation of the budget the new finance minister made no effort to consult with stakeholders. Lewis said that out of normal courtesy it was expected that they would have been consulted as occurred in the past.
Lewis pointed out that Article 13 of the Constitution refers to the inclusion of stakeholders in decision-making and Article 149 refers specifically to the role of labour. In this context he stated, “We have not been consulted and see this process as a political process of expediency.”
Ram said much was expected of the new minister, which he did not live up to. “I thought he started rather disappointingly; he ignored any kind of consultation. So his whole approach to the budget, I thought was bad.”
He observed that the minister spent no time addressing the issue of casino operation and too little time considering questions surrounding the implementation of VAT. “When one looks at the content of the budget you have to wonder whether he has had enough time to apprise himself of the difficulties which our society is facing.”
The commentator said it was “incredible” that an issue like casino operations did not feature in his presentation and “VAT one single paragraph”. As the responsible minister for VAT, Ram said, and with the traumatic experiences encountered in its administration “one would have looked to him to explain why we had certain difficulties.”
Ram suggested the minister should have offered some kind of assurance that he is going to deal with the problems and make sure they do not recur.
More fundamentally he said the tax system has not worked very well because it is short of quality resources and now with the addition of one of the most complex taxes to administer it was to be expected that “we would get a host of problems.”
Ram commented further that the economy is still in a state where, “we are spending about $100 million and earning $60 million.” The country, he said, keeps borrowing more than it is capable of earning and that simply puts pressure on generations to come.
“From my own perspective I hoped he would have spoken of revenue neutrality, he spoke of taxes there before. Yet if you look at it you do not get assurance from the numbers that you would truly like. My initial reaction therefore is to say that I am truly disappointed in what was presented as budget 2007,” Ram said.
Trotman said the budget debate will “peel away that veneer of this wonderful vibrant economy” that the minister spoke of in his presentation. The budget debate is expected to begin on Friday.
Trotman said the almost three-hour budget presentation sounded good like most budget presentations under the administration, but when one examines it under the social and economic reality it is a “dream reaching for the star.” The budget he said was overshadowed by VAT and its continuing problems; by narcotics trafficking; by corruption in the financial system and by the pervasive hopefulness that people feel. The raising of the income tax threshold, Trotman said, did not offer much, but there were some interesting features in the budget that the AFC will support like the training of young people in information technology for job creation and the sports action plan.
It was also pointed out that the budget seems to rest more on the staging of three events: the Cricket World Cup, the Rio Summit and the meeting of Finance Ministers of the Commonwealth Nations. These events, Trotman explained are not sustaining and will merely run for a few weeks.
The Finance Minister, Trotman said, admitted and confirmed the non-neutrality of VAT, when he said that the tax would earn the government $24.8B compared to the $16.8B the government earned from the eight taxes that were originally set to be repealed. Only six taxes have actually been repealed.
