Tax, other budget measures a “hodgepodge” for ordinary Guyanese- Fmr. Finance Minister, Opposition Leader

Last Updated on Saturday, 18 January 2025, 15:47 by Writer

Guyanese earning GY$130,000 or less would not benefit from the child allowance and there is no guarantee that people who earn from other jobs, would declare their income, Former Finance Minister Winston Jordan said Saturday in describing the tax measures, outlined in the government’s 2025 national budget, as a “hoddgepodge”.

“If your salary is a $120,000 you’re already covered by the threshold so telling me that you will be giving me a child allowance of $10,000 doesn’t help me,” he told Demerara Waves Online News in reaction to a number of the measures in the 2025 National Budget of GY$1.382 trillion that was presented by Finance Minister Dr Ashni Singh on Friday.

Opposition Leader Aubrey Norton made an almost identical observation about that measure shortly after Dr Singh’s 5 hours, 6 minutes’ long budget speech. He also said the 8% increase in salary this year to a minimum of GY$108,000 means that those earners would also not benefit from an increase in the income tax threshold of GY$130,000. “You put the threshold at a $130,000 and the minimum wage is not above $130,000, it means it won’t benefit the small man,” he said.

Mr Norton said the Finance Minister made “ridiculous” percentage comparisons between the APNU+AFC in a non-oil period and the incumbent PPPC with oil production and “conceal the facts that there haven’t been significant increases”. “This budget has nothing in it reduce or eliminate poverty,” he said.

Touching on Old Age Pensions, the PNCR Leader flayed the Finance Minister for boasting of a 100% increase in Old Age Pension based on the 2020 figure off GY$20,500 which in reality is GY$5,000 rather than on the 2024 Old Age Pension of $36,000 which, if doubled, would have been GY$72,000 in 2025. Mr Jordan, for his part, said this year’s $5,000 increase in Old Age Pension is among the “cosmetic things” that are not designed to tackle poverty, estimated at 48% by the World Bank and being encountered by “the people at the bottom”. The Guyana government had said that 48% poverty rate was based on 2019 figures.

He said Guyanese across the board could benefit from some tax relief if government had reduced the 14% value added tax (VAT) to 10%. Also, he recommended a proper social safety net at a time when cost of livng is “the bigggest problem” facing Guyanese without a liveable income.

Former Finance Minister Jordan said that a significant number of persons in the public service work for GY$100,000 and less, leading to the conclusion that the measures were not properly thought out. “Carrying the threshold to a $130,000 doesn’t necessarily benefit a lot of people at the lower level because those, who are there, already aren’t geting much of a benefit,” he said.

He also questioned the objective of the GY$100,000 for every newborn baby to a Guyanese mother, stating that the Finance Minister did not inform whether it was to cushion the impact of cost of living, provide further assistance to homes or support the upkeep of the child. “It is a 100,000 to everybody. Those who can afford it, those who can’t afford it and what it’s intended to do,” he said.

Finance Minister Singh had stated that cash grant, totalling GY$1.3 billion, is to “support the development and wellbeing of one of our most precious and valuable population group, newborn babies, who will constitute the future of the Guyana.”

Turning his attention to the income tax waiver on the first GY$50,000 on income from a second job, he doubted how many persons with two jobs actually declare their income to the Guyana Revenue Authority. “The mere fact that you’re recognising second jobs indicates that what you are providing is not even sufficient for the basic living and you recognise that there are side-hustles, side jobs,” said Mr Jordan, a former Budget Director at the Finance Ministry.

With workers in the sugar and bauxite industries already receiving 100 percent tax free overtimee he said workers in the other sectors would not be treated fairly because the first GY$50,000 of their overtime would now be taxed. “No equity, no equity and what is it you intended to do because you already have it a 100 percent in GUYSUCO, you already have it a 100 percent in bauxite so why you discriminating against the other folk,” he said.

In his budget presentation, Finance Minister Singh said, “The concept of working longer and working harder, and in particular, working longer hours is one that we have to embrace, given the recognition that the size of the supply of labour is not growing in Guyana at the place at which the demand for labor is growing. The reality is we need more people. The reality is, we need more people than we have. We simply don’t have enough people, given the rate at which the economy is growing.”

But Mr Jordan cautioned government against “tinkering” with the income tax threshold every year, even as he noted that the PPP-led administration has not put in place a proper tax policy.

The former Finance Minister critcised the current Finance Minister for littering the budget with a repeat of existing plans or others that were recently announced by government. He said almost half of the measures were done in 2024 and another two or three, such as the 50 percent reduction in electricity tariffs and the scrapping of bridge tolls had been already announced . “These are really non-measures. They are not in the strictest sense of a budget, they aren’t measures,” he said.

“A lot of what was said yesterday was a hodgepodge. It doesn’t add up to a vision. Yes, you are going to hear a lot of words about modernisation, transformation and so on but when you put it together, you would get what more looks like a patchwork, rather than a seamless suit,” he said.