The Private Sector Commission (PSC) says it believes that this year’s budget will generate growth and lauded Finance Minister Winston Jordan on his presentation.
In a statement yesterday it however expressed disappointment at the absence of comprehensive reform of corporate taxes and PAYE and said it was concerned at the planned early implementation of the requirement to provide compliance certificates in order to obtain licences.
The PSC said that it is elated at the planned expenditure on infrastructure, in particular the $2bn on hinterland airstrips. It said that this will improve connectivity with the hinterland and allow for access to markets in the city and beyond for producers in those regions.
“The significant sums allocated for education, health, public security and agriculture reveal that the focus of the government is on what is needed by the country and for the good of the people. The PSC is pleased that the Amaila Falls Hydroelectricity project is being studied again and would urge the government to see this project through since it would have untold benefits to business and to all consumers of energy”, the PSC said.
It also expressed pleasure at the plans for a new Demerara Harbour Bridge and the East Bank to East Coast bypass road.
It expressed hope that public servants will soon receive their salary increases and that these will be “substantial” since, not only is this needed but the resultant spending will help the economy to recover. The government has said the increase for public servants is awaiting the conclusion of collective bargaining.
The PSC noted that one of its recommendations to the Finance Minister was comprehensive reform of corporate taxes and PAYE.
“We are disappointed that this has not found favour at this time but we understand that such reform may have to await the findings of the Tax Reform Committee. The increase in the tax threshold is welcomed though we feel that this should have been higher to provide relief to low income earners”, the PSC said.
The private sector is also pleased that there was no reduction in the rate of the Value Added Tax.
“We are also happy that packaging materials have been made exempt from VAT and that tax refunds can now be applied across the board. The increases in gun licence fees are also fair and will boost government revenue but we are concerned about the impact on indigenous people who rely on shotguns for their livelihood”, the PSC stated.
The PSC said that one of its concerns relates to the planned early implementation of the requirement to provide compliance certificates before obtaining licences and said that there needs to be some clarification.
“We feel that this measure, while being a good way to ensure compliance, should have been implemented at least a year after the date of its announcement to give persons time to get their taxes in order. The capacity of the Guyana Revenue Authority is paramount to the smooth implementation of this measure and we do not believe that the agency is currently capable of handling the expected thousands of persons who will be seeking in a short time to regularize their status as taxpayers”, the PSC asserted.
In relation to the ban on vehicles older than eight years, the PSC said that this has a negative connotation and “seems unnecessary at this time and should be seriously reviewed and reconsidered”. It added that this is likely to place undue pressure on low and middle income persons.
“While being generally satisfied with Budget 2016, the Private Sector Commission wishes to urge the government to ensure that all the provisions of the budget are implemented and the allocated sums are spent since approximately 60% of the economy relies on government spending. Also crucial to a vibrant economy is investor confidence. Too many investors have been adopting a ‘wait and see’ attitude and we feel that this budget will restore that confidence and stimulate investment”, the private sector body said.
