After four days of intense scrutiny, the National Assembly passed the $1.382 trillion Budget 2025 on Wednesday evening.
Under the theme, “A Secure, Prosperous and Sustainable Guyana”, Budget 2025 was presented on January 17, marking the second budget in Guyana’s history to cross the trillion-dollar mark, and containing a wave of measures aimed at not only moving the economy forward, but also bringing direct benefits to Guyanese.
The 2025 Budget debate was conducted last week followed by a four-day consideration of the estimates, which wrapped up on Wednesday evening ,with the Committee of Supply going through the Finance Ministry’s allocations.
Following the approval of the Finance Ministry budget, after nearly three hours of scrutiny in the Committee of Supply, the Estimates of Expenditure for Financial Year 2025 had been put on the floor of the National Assembly and subsequently approved without changes.
This paved the way for the House to pass Appropriation Bill 2025 – Bill No 1 of 2025 after it was read three times.
The Income Tax (Amendment) Bill was also approved in the House.
Finance Minister, Dr Ashni Singh explained that the purpose of this Bill was to bring into law the various measures announced in Budget 2025.
Those measures include increasing the income tax threshold to $130,000 and an introduction of a deduction of up to $10,000 per month per child from one parent’s taxable income.
Additionally, the removal of tax on income up to $50,000 earned from a second job and the removal of tax on overtime income up to $50,000 are also catered for.
Further, he noted that the amended legislation “will allow persons paying income taxes to be able to claim for children that they have in the year of income… they may claim a deduction from their taxable income of up to $10,000 per month per child”.
The income tax threshold has steadily increased over the past four years. In 2022, the threshold was raised from $65,000 to $75,000 and this was increased to $85,000 in 2023. With its latest increase to $130,000, Dr Singh indicated that this would result in $8.5 billion in disposable income for workers, while shielding 22,000 workers from having to pay income tax.
For those who do have to pay income tax, known as Pay As You Earn (PAYE), the rate has been lowered from 28 per cent of earnings to 25 per cent. There are further tax incentives for those who work overtime or have a second stream of income.
Other measures
Last year, the PPP/C Government had set aside $5 billion for cost-of-living measures aimed at easing the burden of rising costs on citizens. This year, the Government will be setting aside $9 billion, which the Finance Minister said will be used to address price increases, and ensure that the most vulnerable in society are provided with targeted relief.
The Government will also extend the reduced freight cost for a further 12-month period from January 1, 2025 to December 31, 2025, a measure aimed at keeping shipping costs down and helping to mitigate the cost of living. It was explained that this will cost the treasury over $6 billion.
The Government will also continue to maintain the zero per cent excise tax on fuel, at an estimated annual cost of $90 billion.
Further, bridge tolls will be abolished for all vehicle classes, once the new Demerara River Bridge is completed. According to Dr Singh, this will also apply to the Berbice River Bridge in Region Six (East Berbice-Corentyne) and the Wismar Bridge in Region 10 (Upper Demerara-Berbice).
Additionally, poultry farmers will now be able to depreciate capital assets, such as machinery and equipment used in the production process, over a shorter period with an increase in the writing-down allowance applicable to these machinery and equipment.
