The customary private sector responses to government annual budget proposals have again reflected a mix of praise and criticism with the latter, in the instances of both the Guyana Manufacturing & Services Association (GMSA) and the Georgetown Chamber of Commerce and Industry (GCCI) taking precedence over the former.
In a short statement seen by this newspaper on Wednesday afternoon the GMSA said that while the government’s 2018 budget proposals took on board several of its recommendations it has not provided a menu of measures to stimulate and expand the manufacturing sector.
The GMSA was hopeful that proposed measures to address critical areas such as taxation, access to finance, and energy would have been considered. These could have provided a much needed catalyst for the manufacturing sector to achieve the projected 2.4 percent growth.
However, the GMSA is pleased that several measures that were advocated for the forestry and wood processing sector have been adopted including the exemption of VAT on logs and rough lumber; budgetary allocation of $120 million to commence a national forest inventory; budgetary allocation of $50 million to partner with private sector to establish a consolidated/dimensioned stockyard.
Notwithstanding these interventions, the GMSA is concerned about the continued decline in the forestry sector. Government’s projection of an 8% growth of this sector can only be realized through a holistic approach to the sector’s development.
And the Georgetown Chamber of Commerce & Industry (GCCI), in its ‘take’ on the 2018 budget commended Finance Minister Winston Jordan for what it says was his “consideration of measures proposed” in its discussions with him but pilloried the administration for what it said in its statement was the budget’s failure “to provide clear direction on an incentive regime for (the) private sector …and particularly that there has been no reduction to the corporate income taxation rate, personal income tax rate or a raising of the tax threshold. The GCCI also commended the 2018 budget for what it says are “tax measures removed from the economy which includes the removal of Value Added Tax (VAT) on education, the reduction in the Tributor’s Tax from 20% to 10% and the exemption of VAT on the supply of logs and rough lumber to the forestry sector.”
And the Chamber said in its statement that it viewed as ‘particularly encouraging……. the reduction of deposits to GRA for contested assessments to 1/3 of the contested amount for Board of Appeal and Judge in Chambers.”
However, the Chamber’s release dedicated considerable space to what it said were the “shortcomings of the budget” and specifically its failure “to provide clear direction on an incentive regime for the private sector, apart from the Investment Act and Aid of Industry Act. In this regard, the Chamber is displeased that the fiscal policy initiatives detailed in the budget did not provide stimulus to some main sectors of the economy, and particularly that there has been no reduction to the corporate income taxation rate, personal income tax rate or a raising of the tax threshold.”
And the GCCI said that not only had its hopes for a clear plan for job- creating investments been dashed by the budget but that it also found “worrisome” the fact that there had been “no elaboration of a strategy to absorb workers who will be displaced” by what is now the imminent divestment of GuySuCo. The Chamber bemoaned the fact that “government’s efforts to address the economic and social malaise stemming from this divestment were reduced to 3 sentences in a paragraph” a circumstance which it said gave cause for concern “given the industry’s importance and material impact on the economic livelihood of many communities.”
Meanwhile, the GCCI said that it had anticipated that there would have been “some elaboration” regarding the Oil and Gas Sector including the expected role and recent developments of the Sovereign Wealth Fund (SWF), given what it said was the importance of the Fund “to the creation and promotion of a resilient economy,” and which it says becomes “more worrying” as the country moves closer to the production of Oil in 2020. Contextually, the Chamber said in its statement that it “expected some emphasis to be placed on the promotion of the agriculture sector, particularly through a suitable incentive regime.”