Budget 2022 to address rising cost of living – President Ali

…says no new taxes to be included in budget

Budget 2022, set to be presented in the National Assembly today by Senior Minister with responsibility for Finance in the Office of the President Dr Ashni Singh, will have specific measures that will alleviate, among other things, the rising cost of living while at the same time looking to reduce the income tax burden on Guyanese.

This was revealed by President Dr Irfaan Ali, who in an address on Tuesday revealed that he has asked the Finance Minister to include specific measures that will cushion the impact of inflation, precipitated by the global COVID-19 pandemic that has driven up costs along the supply chain.
“I’m aware of the impact that cost of living is having. While we cannot address all the issues surrounding cost of living, I’ve instructed that resources be set aside to address this issue… this is a global issue, as the world is experiencing a 30 year high in inflation rates due to soaring food costs,” President Ali said.

“Notwithstanding all of this, this Government has made a commitment to do all it can within its budgetary constraint and framework, to help the population of this country. Therefore, I’ve asked the Minister to set aside a sizeable allocation to address issues of cost of living. And this sizeable allocation will be used through consultations with communities across the country, to identify specific ways and initiatives in which we can deploy this allocation to ease the burden on the population.”
Additionally, President Ali emphasized that Budget 2022 will have measures to not only put more disposable income into the pockets of Guyanese but also continue to build on the Government’s “no new taxes” policy.
“I’ve asked the Minister of Finance to include specific measures that will be geared at enhancing and improving your disposable income. Ensuring that there is more money available to families and to the economy,” he said.

“While we enhance disposable income, I’ve also advised that we must maintain a low tax environment. And this was a critical component of our manifesto. Ensuring that we not only remove all those burdensome taxes that were placed there on the backs of Guyanese by the APNU/AFC Government. But also creating a robust economic environment that does not require increased taxes.”

Massive expansions
According to President Ali, Guyanese can also look forward to massive expansions of health and educational services. According to the President, the Government’s aim is to make these services more accessible than ever before, while also increasing the quality of services.
Additionally, he assured that investments will be made into expanding access to treated water, and Information and Communications Technology (ICT), both on the coast and in the hinterland and riverine communities.
“Budget 2022 will set aside a framework and the resources that will look at the massive expansion of our healthcare and educational system. Resources will be set aside to ensure the commencement of a programme that will see 90 per cent of our population along the coast, having access to treated water.”
“This is even beyond what we promised in the manifesto. But we are setting aside these resources because it is essential to the improvement of livelihood, improvement in our living standards.”
When it comes to energy, the President said that the 2022 budget would also put Guyana even further on the path of achieving a 50 per cent reduction in energy costs by 2025… by which time it is envisioned projects such as the Amaila Falls Hydropower Project (AFHP) and the gas-to-shore project will come online.
“This is the year that will inject the fuel that will lead to the transformation we want to achieve. And Budget 2022 will inject that fuel to catalyse the growth in a forward-looking manner,” the President said.

The vulnerable
The President also assured that focus will be paid in the budget to make life easier for the vulnerable in society, such as the children and the elderly. According to Ali, investments will also be made in the security sector, towards ensuring that the Disciplined Services are well equipped to do their jobs.
“Budget 2022 will ensure children get more. Yes, I’ve instructed that specific measures be in the budget to enhance the welfare and wellbeing of children so that children will get more. We’ll set aside greater support for the elderly. We’ll accelerate our scholarship programme. We’ll support the vulnerable, create room for direct medical support for our population. And enhance investment in the security sector,” President Ali further promised.
Other issues the President mentioned that will be addressed are the withholding tax companies have had to navigate, as well as the reduction of taxes on double-cab pick-ups. The budget will also give effect to the Local Content Act passed in the National Assembly last year, while the housing, industrial, and manufacturing sectors will see massive investments.
Importantly, Budget 2022 will mark the first budget in Guyana’s history to be partly financed by oil revenues. This will be Guyana’s first withdrawal from the Natural Resource Fund (NRF) since the country started collecting oil revenues in early 2020.
Currently, US$607 million sits in the fund. While the withdrawal rule restricts withdrawals from the Fund to deposits made in the previous fiscal year, the first schedule of the Natural Resource Fund Act 2021 allows an exception in the first year, giving the Government the latitude to withdraw the total balance in the Fund at once.
The Ministry of Finance has said that such a withdrawal is pertinent to address Guyana’s pressing development needs. Budget 2022 will be read today, January 26, from 14:00h.