The Change Guyana political party on Tuesday proposed a steep reduction or elimination of a range of taxes as a way of reducing poverty and stimulating private sector-led development.
The party is promising to make the first GYD$100,000 of salaries free from income tax in 2020, in view of its calculation that a household cost of living is GYD$120,000 per month. “The effective increase in income will allow for increased access to goods and serviced for the working class
Accusing government of extorting Guyanese by imposing a total of between 84 percent and 247 percent duties and taxes on imported vehicles, Change Guyana said the working class cannot afford recently made vehicles with modern technology. Change Guyana’s prime ministerial candidate, Nigel Hinds says his political party plans to reduce those taxes.
For vehicles under four years of manufacture, Change Guyana plans to implement an overall 50% tax (instead of the current 82% overall tax, comprising 45% duty, 10 excise, and 14% VAT) on vehicles between 1500cc to 2000cc; 75% tax (instead of the current 247% overall tax, comprising 45% duty, 110 excise, and 14% VAT) on vehicles between 2000cc to 3000cc; and 100% tax (instead of the current 297% overall tax, comprising 45% duty, 140 Excise, and 14% VAT) on vehicles over 3000cc.
“Change Guyana reduced tax rates on vehicle imports will enable a significant number of Guyanese to acquire new vehicles and live their lives with more dignity, safety and happiness.
We have to move away from the current system that primarily allows ministers, high-level state employees and senior government contract workers to enjoy that pleasurable experience of owning or using new vehicles. We believe that building of a middle class is a forerunner to economic development,” said Hinds, a well-known chartered accountant.
Change Guyana also promises to remove import taxes on farming, mining, oil, construction and fishing to increase employment, and value-added products for exports. The party plans to attract investors by abolishing property, estate and the 20 percent capital gain taxes.
He says this will level the playing field between foreign investors who get tax concessions and Guyanese as well as cut the frustrating paperwork at the Guyana Revenue Authority.
“The repeal of these taxes will reduce the taxes collected by less than three percent for the specific taxes and will incentivise local businesses and individuals to have real ownership of property and allow the owners to price their property at market price, free from fear of tax charges, provide reliable property valuations, increase economic activity and remove bureaucratic administrative requirements and costly procedures for taxpayers so overall it will result in higher revenue collection and provide for more fairness in the tax system,” he said.
Another tax relief measure, according to Change Guyana, is the reduction of value-added tax (VAT) from 14 percent to 12 percent and the abolition of the VAT on electricity, water, smart phones and cellular data plans to allow low-income families to access learning platforms.
However, Change Guyana’s presidential candidate, Robert Badal cannot say how much money will the treasury lose every year by giving up those taxes and how it intends to pay expenses. “To make that evaluation at this point in time is difficult because you are required to prepare a budget to do that,” he said, adding that his party was confident of balancing the budget or generating a surplus. Badal said his party was merely stating its policies based on his members’ knowledge of business, and multiplier effect of money on the economy.