Private sector seeks higher income tax threshold, tax breaks

Last Updated on Monday, 19 January 2026, 18:21 by Writer

The Private Sector Commission (PSC) has requested that government slash corporation income tax to zero on businesses earning less than GY$60 million annually and increase the personal income tax threshold to GY$160,000, during a pre-2026 national budget consultation.

PSC President Gerry Gouveia Jr declined to provide figures on the grounds that the negotiations were still underway.

Speaking with Demerara Waves Online News hours after finance minister Ashni Singh announced that January 26 is budget day, Mr Gouveia said the business community’s overall requests are aimed at benefitting workers and employers.

“The overview of the matter is that we want to maximise the net take home for local businesses as well as employees,” he told Demerara Waves Online News.

He would only say that the private sector has proposed “significant increases” in the current minimum salary of GY$102,346 and the income tax threshold of GY$130,000.

Asked whether there were any concerns that those proposed hikes could fuel inflation, Mr Gouveia said that was unlikely and so “would take care of inflation as well as put more money in people’s pockets”.

Demerara Waves Online News was, however, reliably informed that the PSC also recommends that commissions and bonuses should be made tax free, and that there should be 30 percent of basic pay allowance across the board.

Faced with a labour shortage of just over 50,000 persons, the PSC proposes a reduction in migrant worker withholding tax from 20 percent to 10 percent for individual foreign specialists.

Among the recommendations tabled at the consultation that was held on January 17 are a reduction of corporation tax, special corporation taxes for small and medium enterprises (SMEs) aimed at promoting their growth, increases in the minimum wage and non-taxable threshold, more financing incentives and providing jobs in rural and hinterland areas.

Information gleaned revealed that the PSC and its affiliates want the 2026 national budget to provide for zero corporate income tax rate for SMEs with yearly earnings below GY$60 million from 0 to 3 years.

The PSC also recommends that the government repeal the 2 percent minimum corporate tax on gross turnover, a move it says can stimulate 0.5 percent to 1 percent growth in trade related sectors.

Also being proposed are reducing the corporate tax rate on commercial entities from 40 percent to 25 percent over two years, non-commercial rate to 20 percent and telecommunications rate toward 30 percent.

Also requested of the government is support for care institutions such as daycares, gender equality and employment and charitable donations. In this area, the PSC is calling for the Deed of Covenant system to be replaced with a 35 percent tax credit for donations and sport sponsorship at the national level.

He said the negotiations also saw the business community asking for an overall VAT reduction as well as the lowering of that tax on certain goods.

Again, while the PSC chief opted not to provide actual numbers, Demerara Waves Online News was informed that the private sector has proposed an overall VAT reduction from 14 percent to 12 percent and zero VAT on locally produced food, water and cooking gas.

In the area of housing, the private sector hoped that the cost of building a three-bedroom house could be reduced by GY$2 million if the five percent duties on cement and ‘finishings’ are zero-rated.

While Mr Gouveia could not say definitively whether finance minister Dr Ashni Singh had promised to implement any of the PSC’s recommendations, he said the minister was impressed by requests to support the under-privileged segments of the population. “Only that the government was enthused and energised about our submissions. They commented. They said that this was a very creative and informative process in the sense that we’ve brought a lot of ideas together that go outside of the normal business framework,” he said.

Mr Gouveia noted that Dr Singh favoured a lot of the private sector’s proposals but could not immediately give a firm commitment because he needed to hold further consultations.

The PSC was among several business support organisations that participated in pre-budget consultations with the minister.

The finance ministry did not provide any details of that meeting in its very broad press release.

Attending the engagement were senior representatives of the Private Sector Commission, Georgetown Chambers of Commerce and Industry, Women Chambers of Commerce and Industry Guyana, Tourism and Hospitality Association of Guyana, Guyana Manufacturing and Services
Association Ltd., Guyana Association of Bankers, and Guyana Gold and Diamond Miners Association.

Also joining the engagement was the Commissioner General of the Guyana Revenue Authority, Mr. Godfrey Statia, and a team of senior officials from the Ministry of Finance.