Govt mulls increasing minimum wage, income tax threshold – Pres Ali

– no timeline given, as State finances being analysed

President Dr Irfaan Ali on Saturday announced that the Government is actively reviewing adjustments to the daily minimum wage as well as the income tax threshold with the aim of putting more money in the pockets of Guyanese.
During a press conference at State House, the Head of State disclosed that they are currently re-evaluating the country’s finances, including projected revenues in order to make these adjustments.
“This is something that I am presently reviewing with an aim at a further adjustment in the daily minimum wage. [I am] also reviewing the absorptive capacity at further advancing liquidity in your pockets… by an adjustment in the tax threshold. This is another issue that I would say is on the front burner of consideration. We are analysing the numbers to ensure that whatever we come up with is in keeping with the sustainability of our economy,” President Ali posited.
Pressed to give a timeline for a decision or announcement of the aforementioned, the President stated that the public would be notified at the appropriate time.
Earlier this year, the Government raised the income tax threshold from $75,000 to now $85,000 in Budget 2023.
In his presentation of the budget back in January, Finance Minister Dr Ashni Singh had noted that this increase in the threshold will see some 12,000 taxpayers being removed from the tax net and will result in a $3.3 billion increase in disposable income.
Meanwhile, the national minimum wage currently sits at $60,147. This was following a 36 per cent increase from the previous $44,200 that took effect on July 1, 2022, in line with the recommendations of the Tripartite Committee.
Despite this increase, however, the public sector minimum wage is still higher, at just over $80,000.
Prior to last year’s hike, the national minimum wage was last increased in 2017, from an hourly rate of $202 to $255, taking the monthly wage from $35,000 to the previous $44,200.
Before the increase took effect last year, Labour Minister Joseph Hamilton had explained that the $60,147 pay raise only impacted about 10 per cent of private sector workers, who were paid below that wage level.
Categories of workers that benefitted from the increase include those in seafood processing, domestic work, internet or café services, call centres, janitorial, schools, hospitals, machine shops, cement factories, auto body shops, wash bays, taxi services, welding, vulcanising, day care, wildlife farms, tour operators, bakeries, filling stations, drug stores, cinemas, sawmills, water factories, scrap metal, radio stations, television stations, casinos, manufacturing, construction, food processing, hospitality, entertainment, ice factories, sanitising, agriculture, retail or wholesale trade, hotels, liquor stores, night clubs, parlours, restaurants, taverns, discotheque, canteens, tailors, security services, garment making among others.
At the time when the increase took effect, it was explicitly stated that any employer that contravenes the provisions of the order shall be liable upon summary conviction to a fine of $50,000 for the first offence. For any second or subsequent office, they will be slapped with a fine of $100,000 or imprisonment for one month.
Over the years as the Government increases public servants’ salary, it has sparked conversations about the low pay grade in the private sector. In fact, the Federation of Independent Trade Unions of Guyana (FITUG) is on record calling on private businesses to follow suit in order to attract and retain their workforce.
This last Labour Day in May, FITUG asked the Government to increase the private sector minimum wage on par with the public sector’s $81,000.
FITUG’s Treasurer, Seepaul Narine, said “As an interim measure, to assist our lower-earning workers, the national minimum and public sector minimum wages should be equated to offer relief and breathing room to families who are harmed by the drastic price increases.”
Expressing his “pressing concerns” about the rising cost of living, Narine had also called on the National Tripartite Committee to begin discussions on a “liveable wage” for the workers at the bottom, who are still faced with challenges despite the various interventions taken by Government to cushion the effects of this situation and bring relief to local workers. (G-8)