The Georgetown Chamber of Commerce and Industry (GCCI) today said that the 2018 budget takes steps in the right direction but expressed concern about the lack of clarity on an incentive regime for the private sector and job creation.
A statement from the GCCI follows:
Georgetown Chamber of Commerce & Industry
Reversals of tax measures and Budget Consultations with Minister of Finance
The Georgetown Chamber of Commerce & Industry (GCCI), commends the Minister of Finance for, what it sees as steps in the right direction – particularly the consideration of measures proposed in discussions with the Minister at Budget 2018 consultation meetings. After conducting a quick review of Budget Speech 2018.
We are pleased with the reversals of tax measures removed from the economy which includes the removal of Value Added Tax (VAT) on education, the reduction in the Tributors Tax from 20 % to 10 % and the exemption of VAT on the supply of logs and rough lumber to the forestry sector.
We also saw the reduction of deposits to GRA for contested assessment reduced to 1/3 of contested amount for Board of Appeal and Judge in Chambers. The GCCI views the Minister’s consideration and incorporation of the measures as particularly encouraging and hopes that this dialogue can extend into the future and other areas of policy-making.
However, the GCCI wishes to express the shortcomings on the Budget to provide clear direction on incentive regime for 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 corporate income taxation rate, personal income tax rate or a raising of the tax threshold.
Additionally, the GCCI was hopeful that a clear plan would have been articulated in the way of job creating investments and/or, facilitation of job-creating investments. Also worrisome, is the fact that no elaboration of a strategy to absorb workers who will be displaced by government’s attempts at GUYSUCO’s divestment/curtailment. The government’s efforts to address the economic and social malaise stemming from this divestment were reduced to 3 sentences in a paragraph and is a great cause
for concern given the industry’s importance and material impact on the economic livelihood of many communities.
Oil and Gas Super-sector Development
It was anticipated by the Chamber that there would have been some elaboration regarding the Oil and Gas Sector and the expected role and recent developments of the Sovereign Wealth Fund (SWF), especially when considering the importance of the SWF to the creation and promotion of a resilient economy. This becomes more worrying as Guyana moves closer to the production of Oil in 2020 and remains, by the Minister’s own admission, vulnerable to external shocks and fluctuations in international commodity prices. When taking this vulnerability into consideration, the Chamber expected some emphasis to be placed on the promotion of the agriculture sector, particularly through a suitable incentive regime.
The GCCI looks forward to copies of the National Estimates where, it will do further analysis into the Government’s fiscal policy for 2018 and the other dimensions of the macroeconomic performance.