The People’s Progressive Party/Civic (PPP/C) Government on Friday presented a $1.382 trillion budget, marking the second budget in Guyana’s history to cross the trillion-dollar mark and containing a wave of measures aimed at not only moving the economy forward, but bringing direct benefits to Guyanese.
Senior Minister in the Office of the President with responsibility for Finance Dr Ashni Singh, presented the 2025 budget under the theme ‘A secure, prosperous and sustainable Guyana’, announcing measures that ranged from tax cuts, cash grants to put more disposable income in the hands of mothers and the fulfillment of the Government’s promises to increase old age pension and the ‘Because We Care’ cash grant.
In one of the most novel measures ever rolled out in Guyana, Dr Singh announced a one off $100,000 cash grant for every new born baby born in Guyana to a Guyanese mother. This puts Guyana in the company of other countries like Singapore, Finland and France, which have implemented what is known as a ‘baby bonus’ that sees varying forms of cash incentives being provided to parents of newborns.
“In the interest of providing support to our youngest citizens, our newborn babies, we will provide a one-off cash grant of $100,000 for every single new born baby born in Guyana, to a Guyanese mother. We expect that will cost approximately $1.3 billion annually,” Dr Singh said.
Senior Minister in the Office of the President with responsibility for Finance Dr Ashni Singh
Meanwhile, Dr Singh announced that in order to put more disposable income in the hands of families, Government will continue its initiative where at least one parent will be allowed to claim $10,000 monthly of their income tax for each child, as non-taxable. The estimated annual cost of this measure, according to Dr Singh, is over $1 billion.
The ‘Because We Care’ cash grant, another measure aimed at benefitting underaged citizens of Guyana, was increased to $50,000, along with a $5000 uniform allowance. When the then PPP/C Government first implemented the measure in 2014, it started off with parents receiving $10,000 per child in the public school system.
However, when the A Partnership for National Unity/Alliance For Change (APNU/AFC) assumed office in 2015, the party discontinued the grant. Since the PPP/C returned to the Government in 2020, they have progressively increased the grant and even extended it to private school children.
Workers
There are meanwhile several measures aimed specifically at workers, with the Finance Minister announcing that the income tax threshold has been increased from $100,000 per month last year to $130,000 per month in 2025.
The income tax threshold has steadily increased over the past four years. In 2022, the threshold was raised from $65,000 to $75,000 and this was increased to $85,000 in 2023. With its latest increase to $130,000, Dr Singh indicated that this would result in $8.5 billion in disposable income for workers, while shielding 22,000 workers from having to pay income tax.
For those who do have to pay income tax, known as Pay As You Earn (PAYE), the rate has been lowered from 28 per cent of earnings to 25 per cent. There are further tax incentives for those who work overtime or have a second stream of income.
“Persons who earn overtime for work beyond their normal working hours, the first $50,000 monthly of their overtime would be non- taxable. This measure is designed to ensure workers are rewarded for their productivity and effort. The estimated annual cost of this intervention is over $600 million,” the Finance Minister explained.
This measure will increase the disposable income of more than 100,000 of taxpayers and is estimated to put $3.6 billion back into the hands of these taxpayers. And according to the Minister, if someone has two jobs, the first $50,000 earned from the second job will be non-taxable.
Pension & public assistance
Meanwhile, pensioners will also be beneficiaries of an increase in the budget, with pension going from $36,000 per month to $41,000 per month. According to the Finance Minister, this will place an additional $4.5 billion of disposable income in the hands of over 76,000 old-age pensioners.
This latest increase means that pension has doubled since 2020. In 2021, all old-age pensioners were given $25,000 monthly; in 2022 that sum was increased to $28,000 and in 2023 that sum increased to $33,000.
Also announced by the Finance Minister is that public assistance will go from $19,000 to $22,000 as of January 1, 2025. The Finance Minister pointed out that the previous APNU/AFC administration had made a promise to double public assistance – something it never did.
“In 2025, (persons with disabilities) will continue to receive monthly public assistance to support their sustenance. Government has also implemented a revolving fund for PWDs, offering interest-free loans to help them expand businesses, which saw 45 beneficiaries to date and 40 more expected in 2025,” Dr Singh said.
“In addition, more than 5,600 PWDs have received assistive aids, and over 900 have received skills training in areas like garment construction, computer skills, and social media marketing, with another 900 expected to be trained in 2025.”
Other measures
Last year, the PPP/C Government had set aside $5 billion for cost-of-living measures aimed at easing the burden of rising costs on citizens. This year, the Government will be setting aside $9 billion, which the Finance Minister said will be used to address price increases and ensure that the most vulnerable in society are provided with targeted relief. He also noted that stakeholders would be involved in deciding how this money is spent.
A $10,000 universal healthcare voucher was also announced by Dr Singh, which will be distributed to every person to finance basic health tests. According to him, this will cost the Government an estimated $5 billion and target potentially 500,000 persons.
The Government will also extend the reduced freight cost for a further 12- month period from January 1, 2025 to December 31, 2025, a measure aimed at keeping shipping costs down and helping to mitigate the cost of living. It was explained that this will cost the treasury over $6 billion.
The Government will also continue to maintain the zero per cent excise tax on fuel, at an estimated annual cost of $90 billion. Further, bridge tolls will be abolished for all vehicle classes, once the new Demerara River Bridge is completed. According to Dr Singh, this will also apply to the Berbice River Bridge in Region Six (East Berbice-Corentyne) and the Wismar Bridge in Region 10 (Upper Demerara-Berbice).
Additionally, poultry farmers will now be able to depreciate capital assets, such as machinery and equipment used in the production process, over a shorter period with an increase in the writing down allowance applicable to these machinery and equipment.
“By allowing poultry farmers to recover the costs of these investments more quickly, this initiative will reduce the financial burden associated with modernising production facilities, further incentivising investment, growth, and innovation while also boosting Guyana’s food security,” Dr Singh announced.
He also stated that Value Added Tax (VAT) has been removed from agriculture machinery.
“In an effort to further support expansion of the agriculture sector, we are proposing to remove import VAT on the importation of machinery used in the agriculture sector, where VAT has not already been removed, thereby reducing cost of inputs. This is expected to cost the Government in excess of $1 billion annually. In addition, to further support the agriculture sector, VAT will be removed on automated poultry pens and veterinary supplies,” Singh said in his presentation.
He also announced the removal of VAT on back-up generators.
Opposition reaction
Opposition Member of Parliament Juretha Fernandes told media operatives that while the Government tout projections of economic growth, fueled largely by the oil sector, the budget fall short of the transformative change needed for the average citizen.
Moreover, the Government announced a reduction in PAYE taxes from 28 per cent to 25 per cent while raising the tax threshold to $130,000. However, the Opposition MP believes that these adjustments are not enough to offset the high cost of living.
