Last Updated on Friday, 12 February 2021, 20:06 by Denis Chabrol
Oil revenues pegged at US$1 million in 2021
Finance Minister Dr. Ashni Singh says Guyana’s economy is expected to increase by 20.9 percent in 2021 and he announced that the prices of basic food items, water and Internet data will be reduced with either the removal of Valued Added Tax (VAT) or zero-rating of them.
Delivering the 2021 National Budget Speech, he said the 20.9 percent projected growth and 1.6 percent inflation would depend on an ease in COVID-19. “This is premised on the assumption that a reopening of the economy takes place with COVID-19 restrictions being gradually lifted and is, therefore, subject to significant downside risks,” he said. He forecasts that the non-oil economy growing by 6.1 percent, a significant reversal of the 7.3 percent contraction in 2020.
He said GYD$750 million have been set aside for the the phased rolling out of COVID-19 vaccines from February and for the rest of the year with the first batch for frontline workers, the elderly, and persons living with comorbidities. Dr. Singh said while Government’s ultimate aim is to promote vaccination towards achieving herd immunity before end of 2021, mask wearing, sanitising and physical distancing continue to be critical to containing transmission.
The Finance Minister, in his presentation of the GYD$383.1 billion dollar budget, said Old Age Pensions would increase from GYD$20,500 $25,000 and Public Assistance would be hiked from GYD$9,000 to GYD$12,000.
He said the budget would be tax free.
Inflation will be 1.6 percent. The overall deficit of the Central Government is projected to be 8.7 percent of GDP, compared with 9.4 percent at the end of 2020.
The Finance Minister says basic food items and household necessities are now expected to cost less with the zero-rating of items such as wheat, breads, oats, biscuits, cooking oil and locally produced bed sheets.
Dr. Singh also said the government would remove VAT on Internet data for home and individual use. He says the government would approve the New Building Society (NBS) to lend up to 15 million Guyana dollars, up from GYD$12 million. Dr. Singh says stone imported from CARICOM for housing will be VAT zero-rated, and a reduction from 15 percent to 5 percent duty on industrial grade cement.
The Finance Minister also says there will be a five percent reduction in water tariffs for all categories of consumers.
The Finance Minister says the non-oil sector is expected to grow by 6.1 percent in contrast to the 7.3 percent contraction. But, the oil and gas subsector’s daily rate of production for 2021 is expected to be just over 109,000 barrels of oil per day. This subsector is projected to grow by 46.7 percent in 2021, he said.
Dr. Singh said export earnings are projected to increase by 46.4 percent to US$3,788.8 million, reflecting projected higher export earnings from all commodities. In particular, he said, crude oil exports are projected to increase by US$1,038.6 million in 2021.
The sale of assets owned for more than 25 years will no longer attract Capital Gains Tax.