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2018 National Budget “private sector-friendly” but tax reversal impact will be slow- Private Sector Commission official

The Private Sector Commission (PSC).

A senior Private Sector Commission official Tuesday night welcomed government’s decision to roll back a number of tax measures, but said the 2018 National Budget was expected to be “non-impactful”.

“The budget is immediately non-impactful on the economy but some of the measures that were reversed are very, very good,” PSC executive member, Ramesh Dookhoo told Demerara Waves Online News shortly after the business organisation reviewed the budget that was presented to the National Assembly on Monday. “You are not going to see the benefits immediately. I don’t think you will see the benefits within a year,” he added.

While the business community had hoped that the 2017 budget would have provided a “big picture economic revolution” including a plan for investments, incentives and job creation, the PSC official said “it’s basically a private sector-friendly budget”.

He said in 70 percent of the cases where the taxes were reversed or reduced, it shows that the business organisations’ lobbying has paid off by providing government with technical data, but  the impact of the tax reversals would not be felt immediately.

The Guyana Gold and Diamond Miners Association (GGDMA), for its part, credited government with cutting the tributors tax on miners from 20 percent to 10 percent. “The Guyana Gold and Diamond Miners Association [GGDMA] welcomes the tangible results of its meaningful consultation with the Government of Guyana on Budget 2018. These welcome changes to the current regime will have tremendous positive impacts in expanding and sustaining the local mining industry, but also the economic well-being of Guyana as a whole.

The GGDMA wishes to thank His Excellency President David Granger and the Government of Guyana for removing this onerous burden on the Gold and Diamond mining sector,” the association said.

Dookhoo commended Finance Minister, Winston Jordan and the government for allowing private sector employees to use their travel allowance as they see fit without the need to provide proof of travel unlike government employees. “I commend the minister and the government of Guyana for that. It’s a very, very positive thing that has been hanging around,” he said.

In relation to tourism, the PSC Executive Member said he was extremely happy for the “duty free” concessions on vehicles to be used in the interior by tourism operators.

Dookhoo described the budget as “private sector friendly” and said he was prepared to scoff at anyone who frowned on the 40 percent tariff on imported pinewood because the private sector should see it as an opportunity to produce high quality kiln-dried wood of a comparable standard for the local market. “We have to start somewhere to preserve the development of the value-added sector within all legal boundaries- WTO (World Trade Organisation) rules, CSME (Caricom Single Market and Economy) rules and what the government has done is WTO compliant,” he said.

The PSC official cited the pinewood tax as an example of the budget not benefiting the private sector immediately because entrepreneurs would have to first recognise the opportunities and then invest.

Touching on the tax amnesty for companies and individuals, the PSC official was far from impressed and said the Guyana Revenue Authority (GRA) needs to focus on tax

“I think you need to strengthen the GRA, you need to pay them better, you need to put qualified people in there to work and if you don’t file your tax returns ‘we will find you’ and ask you why,” he said. Dookhoo acknowledged that the amnesty would allow some businesses and persons to start off with a clean slate, after years of delinquency.

Government also announced that it has decided to abolish the 14 percent tax on education services, one year after its introduction that had sparked off condemnation and picketing demonstrations outside the Ministry of Education, Ministry of Finance and other government offices.

The PSC, he said, was disappointed that government did not increase the income tax threshold or pay a one-off bonus because that would now mean less monies for ordinary Guyanese to spend between now and early next year. He noted that many businesses look forward eagerly to a peak in shopping for the Christmas and New Year holiday.

The GGDMA welcome the tangible results of its meaningful consultations with the Guyana government and credited the partnership with the Guyana Women Miners Organisation and the National Mining Syndicate during those talks and “speaking with one unified voice”. The Miners Association also thanked Ministers Jordan, Raphael Trotman, David Patterson, and the Commissioner General of the GRA, Mr. Godfrey Statia for accommodating the many meetings and negotiating forums with the small and medium scale miners of Guyana.

“Over the past decades it has been the Gold and Diamond mining sector that has kept Guyana’s Economy growing from stride to stride. We are elated that the government has recognized these valuable contributions and has made sensible considerations based on prudent advice from stake holders.  We look forward to continued fruitful negotiations with the Government of Guyana going forward,” the GGDMA said.