In its detailed analysis of budget 2017, chartered accounting firm Ram and McRae says the proposed budget measures if implemented will have a negative impact on the economy and growth.
“In our view, the achievement of the projected growth will be extremely difficult, if not impossible to achieve”, Ram and McRae said.
The survey also criticised the proposed revamping of the VAT regime.
“The proposals in relation to VAT are substantial but represent a substantial rejection of the main principle of a VAT system. Items such as medical services and prescription drugs will now be subject to VAT – it is hard to believe that this is what was intended. But the Minister only focused on Water and Electricity. We have tested the proposals and found them to cause an increase in prices including on a most basic food item – bread. At the practical level, these proposals will therefore be inflationary”, Ram and McRae said.
It called on Finance Minister Winston Jordan to rethink his position on the proposed VAT changes.
It also labelled as “absurd” the proposed amendment to the Income Tax Act to allow for garnishing of funds from a taxpayer’s bank account for non-payment of tax.
The analysis also described as “completely unacceptable” the proposed amendment to the VAT Act to allow the GRA Commissioner-General to issue a direction to prevent a person owing tax under the Act from leaving Guyana.
The findings of the Ram and McRae analysis are to the left of this section. It is also available in today’s print edition of Stabroek News.