Finance Minister Winston Jordan today announced that private sector employees will enjoy a tax-free vacation allowance.
In his budget speech today, he said:
- Income Tax – Travel Allowance
Mr. Speaker, currently, public sector employees enjoy a tax-free vacation allowance, regardless of whether they spend their vacation in Guyana or abroad. On the other hand, private sector employees are only given the allowance to the extent of the cost of the passage to travel abroad. I propose to remove this anomaly, thereby allowing private sector employees to enjoy the vacation allowance tax-free and to use it as they see fit. As in the case of public sector employees, a tax-free vacation allowance to a private sector employee will be allowed up to a maximum of one month of the employee’s base salary. The GRA will scrutinize these allowances closely to ensure that the previous abuse of this benefit-in-kind, where employees were being paid huge vacation allowances, in lieu of salaries, does not recur. This measure takes effect from January 1, 2018.