Govt slashes excise tax on fuel

– consumers to pay less at pumps

Minister within the Office of the President with responsibility for finance, Dr Ashni Singh

Senior Minister within the Office of the President with Responsibility for Finance, Dr Ashni Singh, on Wednesday evening announced that Government would be reducing the excise tax on gasoline and diesel, to ease the domestic impact of the recent sharp rise in the world market price for fuel.
In announcing the cut in excise taxes, Dr Singh noted that, over the past few months, oil prices have risen steadily on the world market, from US$35 a barrel in late October 2020 to over US$60 a barrel at close of trade on Wednesday.
As a result of this steady increase on the world market, fuel prices have also been rising on the domestic market.
In order to minimise the impact on domestic consumers, particularly the travelling public as well as those productive sectors for which fuel is an important input, Minister Singh announced, the Government would be lowering the excise tax rate on both gasoline and diesel from 50 percent to 35 percent with immediate effect.
As a result of the reduction in the excise tax rates, the prices at the pump would also be reduced with immediate effect. Specifically, gasoline prices are expected to be reduced from $184 per litre to $170 per litre, and diesel prices from $170 per litre to $160 per litre.
The Minister explained that, during its previous term in office, the People’s Progressive Party/Civic (PPP/C) Government had put in place arrangements to adjust the excise tax rate on fuel from time to time, to cushion the domestic impact of world market price fluctuation, and that the current tax adjustment is being affected using this previously established mechanism.
Minister Singh emphasised that the adjustments are in keeping with the strong ongoing commitment by President Irfaan Ali’s Government to ensure that domestic customers are protected from sharp price escalation on the world market, and from cost-of-living increases.
On Friday last, the Government presented the $383.1 billion 2021 budget, themed “A Path to Recovery, Economic Dynamism and Resilience”, without the introduction of any new taxes.
During his presentation of the 2021 budget to the National Assembly, Minister Singh underscored that water is essential to daily activities, both at the residential and commercial levels. To this end, he revealed a five per cent reduction in water tariffs across the board, targeting all levels of consumers.
According to the Finance Minister, Guyanese were burdened with the VAT that was imposed on water consumption, while the water subsidy for pensioners had been stripped – all at the hands of the APNU/AFC coalition.
Nevertheless, he noted that within two months after taking office in August 2020, the PPP/C Government undertook steps to reverse those harsh measures, including restoring the water subsidy to senior citizens, from which some 28,270 persons have benefited thus far.
In addition, Budget 2021 caters for the removal of duties on ATVs (all-terrain vehicles) for use in the hinterland. Dr Singh posited that this would reduce the cost of transportation to hinterland communities for operators.
Moreover, other sweeping relief measures introduced in the 2021 budget include a cash grant of $15,000 per child to be given to the parents of children in the nursery, primary, and secondary schools in the public school system.
Government would also be raising Old Age Pensions from $20,500 to $25,000 with effect from January 1, 2021 – a measure that would benefit over 60,000 persons and put an additional $4 billion of disposable income in their hands.
Another measure is the increase of Public Assistance payment from $9000 to $12,000 monthly, benefiting over 13,000 persons and providing an additional $500 million in disposable income to these individuals.
According to Minister Singh, the measures introduced in the 2021 budget would add a further $10 billion to last year’s $40 billion annualised cost.