…no measures for ordinary citizens
…$1000 increase for pensioners
…tax exemptions for dentures, electric cars
At $300.7 billion, the National Budget for 2019 was presented on Monday to the National Assembly. But through it all, measures that can directly benefit the small man are noticeably absent.
The only thing that Finance Minister Winston Jordan, who spoke almost uninterrupted for five hours during his budget presentation, announced under ‘measures to increase workers’ income was the increase in the income tax threshold to $780,000 per annum ($65,000 monthly).
This is an increase per month of $5,000, as the salary threshold was previously $60,000. Accompanying this increase was a promise from the Government that it would re-engage the Guyana Public Service Union (GPSU) in negotiations to improve allowances.
There were also measures for the elderly. For instance, pension was increased by $1,000, from $19,500 to $20,500. Following the $1,000 increase trend, public assistance was also increased from $8,000 to $9,000.
“Many former public servants, Members of Parliament and other categories of workers who retired prior to 1992 have approached me with a view to 90 doing something about their pensions, which were decimated as a result of repeated devaluations in the 1980s and early 1990s.”
“They have indicated that they are getting on in age and wish for the Government to bring urgent relief to them. I want to assure those persons that the matter is under active consideration,” Jordan also announced.
In addition, Jordan announced exemption from Value Added Tax (VAT) on orthopedic appliances like crutches, surgical belts, splints, hearing aids and false teeth. He also announced exemptions on boats used in rural and riverine areas designed for the transport of goods and persons not exceeding 7.08 cubic metres. The import Duty of five per cent will also be waived
Tax incentives
Jordan also announced tax incentives focused on the disabled, persons importing cars and companies. For instance, Jordan said, changes would be made to the Income Tax Act to facilitate the write off capital expense within two years, and also waive import duties and VAT on new equipment for companies using alternate energy technology.
The minister also announced measures to waive customs duty for hybrid and electric vehicles with an equivalent cylinder capacity of 2000, exemptions for change over kits and to waive excise tax on all electric motor cycles. He noted, however, that vehicles modified within two years of entering Guyana attract full duties and tax.
Jordan announced that a system of credits would be used in the Remigrant Scheme, with a ceiling of $5 million. For example, he noted, if a remigrant brought in three vehicles with a value of $20 million, they would receive a tax-free allowance of $5 million and pay applicable taxes on the remaining $15 million. This proposal did not sit well with several Opposition parliamentarians, who heckled the move.
Another measure Jordan announced was to allow returning students who have completed at least three years of continuous study eligibility for re-migrant status. In addition, he proposed removing the six months overseas ownership stipulation.
“This allows the remigrant the option of purchasing the vehicle locally within six months of his/her arrival. This would be advantageous to the remigrant who lived in a country where driving is on the right, as opposed to Guyana, where it is on the left,” Jordan said.
Jordan also proposed exempting vehicles to be used by persons with disabilities from Excise duty and VAT. He said that Government will also examine the feasibility of tax rebates on handsets that have accessibility features for disabled persons.
“This will allow Guyanese who are visually and hearing impaired to afford a smartphone. In order to avoid abuse, the exemptions would be granted after the Commission representing Persons with Disabilities certifies that the person, the vehicle and the handset are eligible for the concessions. These two initiatives solidify Government’s commitment to equity and inclusion for all its citizens through the use of (Information and Communication Technology),” Jordan said.
Private sector
The minister proposed that changes be made to the Income Tax Act to ensure that tax on gold mining activities be assessed based on a sliding scale. This, he noted, would be the final tax on income from such activities.
Small businesses will also benefit from a reduction of income and corporate tax rates to 25 per cent on taxable profits. To benefit, however, these businesses have to be registered with the Small Business Bureau. Jordan also announced a reduction of the manufacturing rate to 25 per cent, from the previous 27.5 per cent rate.
Also to be adjusted is the property tax threshold to $40 million for individuals and companies. In addition, persons who sell their house and reinvest the proceeds in another home of equal or greater value will be exempted from Capital Gains tax. This must be done during the year of assessment, or within 60 days of the year the property is sold.
“In addition, Mr Speaker, in recognition of inflation through the years, I propose to increase the threshold for Capital Gains Tax arising from disposal of property from $1,000 to $500,000. The revenue loss is expected to exceed $102 million.”
But it was Jordan’s announcement that 2019 would herald a new age wherein there are no more shortages of drugs that touched off a crescendo of heckling from the parliamentary Opposition, who have long criticized Government for persistent drug shortages at public institutions.
The budget made little mention of monies that would be allocated for institutional capacity-building in the oil sector. This is even as first oil is little over a year away. Jordan did note, however, that the Cost Oil Audit Unit would be set up in the large taxpayers unit.
