Budget 2021: transformative, pro-business; people-focused – PSC, GMSA and AmCham
Budget 2021 has attracted praise from the business community including the Private Sector Commission (PSC), Guyana Manufacturing and Services Association (GMSA), American Chamber of Commerce (AmCham) Guyana, with the policies contained in the $383.1 billion budget being lauded for their economically and Private Sector friendly measures.
The budget, which amounted to $383.1 billion, was presented by Finance Minister Dr Ashni Singh on Friday. In a statement on Saturday, the PSC lauded the budget for being both pro-business and pro-working class, with the creation of new social programmes.
“The PSC, prior to the budget consultation, would have made written submissions regarding its proposals for the national budget 2021. The PSC is pleased to see that those proposed measures were largely considered and reflected in the national budget for 2021,” a statement from the Private Sector body stated.
It noted that the budget is indeed a people-focused budget, which is healthy to facilitate broad-based and inclusive growth of the economy in terms of job creation, encouraging private investments and more entrepreneurial activities. “Dr Singh should also be commended that while being pro-business, this budget is also pro-working class and factors in a number of new social programs,” the statement read.
Among the budget highlights the PSC identified were the $6 billion allocation for housing, $53.5 billion for health and $15.3 billion for public security. The budget also includes $25.6 billion for public infrastructure and has removed Value Added Tax and duty on data and ATVs for use in the hinterland.
“Budget 2021 estimates totalled $383.1 billion; $22.6 billion allocated for the agriculture sector, Zero-rating of construction and homeownership (building materials), reduction of duty on industrial cement from 15 per cent to 5 per cent, increase in low-income mortgage ceiling from $10 million to $12 million, removal of VAT on data for residential and individual use, removal of duty from ATVs for use in hinterland,” the Commission said.
According to the PSC, Budget 2021 also provided for the “reinstating of the capital gains tax whereby the sale of assets that were owned for more than 25 years will not attract capital gains tax will not attract capital gains on their disposal and restoring VAT zero rate on basic food items and household necessities.”
The PSC also noted that the budget seeks to fuel the construction boom, by including policies like the resuscitation of the housing drive and targeting 10,000 house lots for 2021. Added to this is the massive infrastructure development that includes hotels, new roads and bridges, shore-based facilities and public and private infrastructure.
Additionally, the Commission noted that by reverting basic food items to the pre-2015 zero-rated status such as on flour, bread, biscuits, cooking oil etc, the reduction of water tariffs to 5 per cent; reducing the cost of construction and homeownership to achieve the 10,000 house lots target, will all assist in lowering the cost of living particularly for the working class. It also welcomed the Government’s focus on the gas-to-shore project and the reduced energy costs it would bring.
“Taken together, Budget 2021 contains sufficient fiscal measures and public investment programmes that will encourage the growth and expansion of the private sector thus creating more job opportunities for Guyanese, lowering cost of living, homeownership becoming more affordable and more disposable income in the hands of Guyanese working class,” the PSC said.
Meanwhile, the Guyana Manufacturing and Services Association (GMSA) congratulated Government on delivering the budget. According to the GMSA, Budget 2021 will help usher in much-needed growth and development, especially for the manufacturing sector.
The GMSA said that it recognises that the $383.1 billion budget, deemed the largest in the history of Guyana, is not financed from any new taxes, and in line with earlier commitments, there will not be any new taxes in the budget. “The Association commends the Government for crafting a budget that is visionary, comprehensive and spans every sector of the economy.”
In fact, the GMSA revealed that the budget measures are in line with many of the recommendations they submitted to the Government. It welcomed, among other things, the announced incubator for agro-processors, $832 million for agricultural infrastructure and $250 million for the small business bureau.
“Among the many measures presented by the Finance Minister, the GMSA welcomes: Government’s commitment to establish new industrial estates; The $6 billion to be spent on enhancing infrastructure; The allocation of $25.6 billion for the building and upgrading of roads and bridges country-wide; The allocation of $135 million for the procurement of the single window system,”
The GMSA also lauded the reduction in duty on industrial-grade cement and the zero-rating of VAT on local pre-stressed concrete and other materials. Additionally, it welcomed the announced investments in research and skills training, as well as the renewed focus on the Low Carbon Development Strategy (LCDS) and investments in renewable energy.
American Chamber of Commerce (AmCham) Guyana, meanwhile, released a statement in which it lauded the Government for the increased investments in health, education, security and public infrastructure. It also singled out the $235 million allocated to improve Guyana’s ease of doing business, as well as $250 million to assist small businesses.
“AmCham is especially pleased and encouraged by the allocation of G$250M to assist micro businesses and aid in their growth. The continued support to SMEs is critical as it will help to mitigate the economic downturn from COVID-19 and contribute to faster and stronger economic recovery,” the Chamber said.
Additionally, AmCham welcomed the projection of 20.9 per cent economic growth, with the non-oil economy accounting for 6.1 per cent. They pointed out that Guyana remains one of the few countries in the world with strong growth projections.