Conclusion

Once again, Finance Minister Winston Jordan has delivered an early Budget which should be passed before the beginning of the new year. Credit is also due to the Minister for living up to his public commitment prior to the budget that there would be no new taxes. After the criticisms he received last year, he probably thought that discretion is the better part of valour. Given the year of assessment basis for taxation, the impact of the tax reductions could only be seen in taxes that are paid on a current year basis, such as income tax collected on the PAYE basis and Value-Added Tax (VAT). In the case of the former, tax collections actually increased while in the case of VAT, there was a significant reduction. The Minister may wish to obtain from the GRA their perception of the reasons.

Budget 2018 continues the pattern of annual increases in spending and while it reports increased revenues, the deficit is now over fifty billion dollars to be financed by debt. Debt service as a percentage of revenue has increased. The forestry and the domestic gold mining operators will probably be satisfied but the poor, women, youths and the unemployed will see little immediate relief in the Budget for them.

While Ram & McRae is convinced that tax reform is needed to make the system fairer, we continue to be concerned about the level of government spending driven by the massive expansion of the public service without any regard for whether or not taxpayers receive value for money. Contrary to what the Fiscal Management and Accountability Act provides, the bloated number of ministers, most of whom have little competence or experience in management have power over billions of dollars. A key competence of a good manager is the ability to make timely decisions. As we saw in the case of the second prison riot leading to the destruction of Guyana’s largest prison, no one is fired by this Administration regardless of how poor they are.

What is most troubling is that the Government does not seem to have any underlying national values or philosophy or to understand the nature of the State or its Constitution. Regions should be given more power and resources under clear rules and a new Regions Management Act. We are disappointed too in the lack of performance by the National Assembly. Its first duty is make laws for the peace, order and good government of the country.  Its failure is spectacular although it does require the Attorney General and other members of the Assembly, including from the Opposition to initiate legislation.

The year 2018 will see local government elections which may reflect citizens’ assessment of the Administration. Regardless, it is hoped that the animosity between the Government and the Opposition will thaw and they will realise why they are put there by citizens in the first place. They must be vigilant in making sure that the billions available to the Government is not easily be frittered away by incompetence.

This budget is likely to be much less contentious than the 2017 budget which included a number of controversial taxes.

Ram & McRae,

Chartered Accountants,

Waterloo Street,

Georgetown.

29 November 2017

Comments  

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