As part of its proposals for the 2019 national budget, the Federation of Independent Trade Unions of Guyana (FITUG) has recommended that government increase the income tax threshold to $100,000 per month, widen the income tax base by capturing several high income earners and professionals who may have avoided taxation, and provide income-support for laid off sugar workers.
FITUG, following an invitation from the Ministry of Finance, met with Junior Finance Minister Jaipaul Sharma and other officials of the Ministry regarding its suggestions for the 2019 budget on Thursday.
According to the eight-page document which it submitted, tax revenue has increased from $136.5 billion in 2014 to $171.5 billion in 2017, which FITUG claims shows that “taxes have eaten into workers income in spite of across-the-board, imposed, increases which have been awarded over the last few years.”
It noted that revenues from Value-Added Tax (VAT) and excise taxation have grown by nearly 25% and income tax revenues by just over 31%, which it says justifies increasing the threshold to $100,000 per month.
FITUG has also recommended the introduction of tax relief for taxpayers with dependents; removal the 1/3 tax threshold for income earners who earn in excess of $180,000 per month and having a second tax tier set at $200,000 per month; removal of VAT on electricity, water, and private health care and a re-examination of tax exemptions and write-offs provided to private enterprises. “We urge that such exemptions/write-offs be predicated on job creation and aligned with national development goals,” the umbrella trade union body notes.
As it relates to widening the tax net, the Guyana Revenue Authority has been working to implement a presumptive taxation method for certain classes of professionals, which Commissioner General Godfrey Stata has indicated can be facilitated by Section 29A of the Income Tax Act but there is no indication as to whether this method has yet been used.
Income-support for sugar workers
For sugar workers made redundant and communities affected by the restructuring of the sugar industry, FITUG has recommended an income-support mechanism to ensure families can meet their obligations and send their children to school, among other things.
It has also recommend the introduction of school bus services to transport all school-aged children from their homes to school and vice-versa; the establishment of an enabling mechanism to promote investment in the areas with a view to spur job creation; the introduction or expansion of school-feeding programmes; the establishment of skills training programmes to allow the former sugar workers and the youth to receive skills that are demanded by the labour market and matching them with available vacancies; and the provision of social counselling and other require social programmes to assist in reducing depression and other social anxieties that may be affecting them.
FITUG also noted that notwithstanding a national 40-hour work week, workers are working beyond the stipulated time. “It is especially bothersome for males who are working, on average, more than 10 hours per week above the stipulated working-week,” it said.
The union argues that the fact that workers are forced to work beyond their normal time seems to indicate that low rates-of-pay are being offered and the workers must work the extra hours in order to make ends meet and it stressed that this reality along with unemployment rate which stood at 12% at the end of September, 2017 is reason enough for budget 2019 to have training or re-training programmes for those who are unemployed. “This, we believe, could be done through extant agencies like the Board of Industrial Training for instance,” it said, while adding that priority work should be given to the establishment of a National Job Bank to allow employers and prospective employees a central point to meet.
Meanwhile, as it relates to trade unions, FITUG has requested an increase in the annual government subvention to $750,000 so that unions can better train and educate workers about their rights.
“Far too many workers are at sea when it comes to their rights, benefits, responsibilities, and obligations,” FITUG argues, while noting that thought government has approved a subvention, some unions have not been able to access the allocated sums even after satisfying the requirement set out by the Ministry of Social Protection.
“They [unions] have engaged in training activities which utilized scarce union funds with the hopes of being reimbursed,” FITUG added before asking that government seeks to correct this sad situation and increase the subvention from $500,000.
Additionally, it asked that all trade unions benefit from duty-free concessions since the work of trade unions is spread throughout the length and breadth of Guyana and the possession by unions of vehicles is critical. The union has also made a series of recommendations in relation to offering support to the unemployed, improving available systems to assist in the search for jobs and making it more likely that workers will have larger disposable income.
It has also advocated increasing the rate of old age pension to $30,000 per month; reintroducing electricity and water subsidies for old age pensioners; utilizing the government school buses, when not transporting students, to transport pensioners to uplift their pensions and to visit hospitals, health centres, etc; reducing the excise tax on fuel towards having a reduction of public transportation fares and the cost of transportation of goods; and examining the introduction of 24-hour state-operated day care for single parents.
