After a mere 38 days since taking the reins of power, the PPP/C Government on Wednesday presented a $330 billion Budget to be approved by the National Assembly.
This is quite commendable, considering the fact that, normally, undertaking such a task would take over three months. It meant that from the time the new Government was sworn in to office, it was engaged in working non-stop to understand what the country’s financial situation was at the time, and plan for the remainder of the financial year.
As correctly stated by Minister of Public Infrastructure, Juan Edghill, who was tasked with the presentation of Budget 2020, the estimates were prepared and presented after “one of the most testing, convoluted, complicated, and traumatic periods of Guyana’s post-Independence history”.
He pointed out that our nation’s young democracy was under severe duress; however, the Guyana Constitution and the judicial system showed their resilience in the face of repeated efforts to undermine both.
There are two main overriding priorities in Budget 2020: containing the spread of COVID-19, and opening up the economy and restoring economic activity to some level of normalcy. The Government must be applauded for taking immediate steps to provide assistance to families, and, in a broader sense, reverse the downward trend of the economy.
A perusal of the Budget shows that there are several provisions aimed at bringing relief to families and giving a boost to businesses that have been squeezed over the past months. Vice President Bharrat Jagdeo had, in fact, quantified the money persons will save or receive is in the region of $20 billion.
In this year’s budget, members of the Joint Services will be receiving a two-week tax-free bonus. This, therefore, means that the Guyana Police Force (GPF), the Guyana Fire Service and the Guyana Prison Service will benefit.
One measure aimed at providing direct assistance to families is the $25,000 cash per household distribution drive. For months, many persons have been struggling to meet the needs of their families due to their being laid off etc.
Also, the old-age pension will be increased to $25,000 per month. This is in addition to pensioners receiving free water, with the overall removal of Value Added Tax (VAT) on electricity and water.
The Budget also included several tax-relief measures that would ease the burden on both individuals and businesses. For example, it was announced that VAT would be removed from all medical supplies, not just those related to treating COVID-19 and its symptoms, or even for Personal Protective Equipment (PPE).
Additionally, VAT will also be removed from hinterland travel and cell phones, as well as building and construction materials. The Government will also be removing corporate tax on private education and healthcare, a measure likely to bring the service costs down.
When it comes to school children, the Government has said that it would be implementing, effective from January 1, 2020, a $15,000 cash grant for children, and a further $4000 uniform voucher allowance. This assistance would greatly assist families to offset educational expenses such as stationary and other items, especially considering the fact that some students would now be engaging in academic learning at home.
The budget also contains measures that would boost the productive sectors. For example, VAT has been removed from all exports, as well as from machines and equipment. Additionally, duties have been reversed on machines and equipment.
Further, tax concessions will be granted for persons operating in the mining, agriculture and forestry sectors. For years now, these sectors have been crying out for attention from the Government. Many of them have had to downsize or close their operations altogether.
It was also announced that $800 million had been set aside for the Amerindian Development Fund. This will provide funding to support the socio-economic development of Indigenous communities and villages through the implementation of Community Development Plans (CDPs) the Indigenous communities themselves picked.
These are just some of the measures that were catered for in Budget 2020. From what we have seen so far, the economic policy of the Government has been very inclusive and well thought out. We are confident that once the Budget is passed, the economy would begin to show signs of a turnaround, and this positive effect will trickle down to ordinary citizens.
