Lack of confidence in economy slowing investment – Dookhoo

As the year 2018 commences, former Private Sector Commission (PSC) Chairman Ramesh Dookhoo is optimistic that Government will further reduce some of the tax measures implemented on key sectors during 2017.
In a recent interview with Guyana Times, he noted that investments have slowed owing to a lack of confidence in the economy.

Government has, over the last two years, sought to broaden the tax base to capture wider sections of society, especially those in the manufacturing sector. However, industry members continue to decry challenges from high manufacturing costs and reduced earnings as a result of the hike in taxes. Dookhoo, a prominent stakeholder in the Private Sector, expressed that these measures were especially hurting the forestry, mining and even the retail sector.
He told this publication that with the many engagements that Finance Minister Winston Jordan has had with Private Sector operatives, including the Guyana Manufacturing and Services Association (GMSA), he remains hopeful that the tax measures will be reversed.
“I’m optimistic because the Minister has reversed a number of things from before, having recognised the serious impact that [the taxation] had on businesses,” Dookhoo pointed out.
This newspaper understands that forestry experts have a delegation that has been engaging the Finance Ministry’s technical team in attempting to alter several of these measures. In fact, when the 2018 Budget was presented to the National Assembly in early December, it included the exemption of Value Added Tax (VAT) on logs and rough lumber which was a reversal of one of several measures implemented in 2017.
Dookhoo is of the view that it is only a matter of time before VAT is removed on other measures, having observed the noted uncertainties that exist in the local economy.
“You saw a cry from the gold miners regarding the levels of productivity in their business – that was also addressed by Minister Jordan, [but] there’s a lot of uncertainty in the economy. I heard the head of the banker’s association say recently that $30 billion of loans have been approved to do projects, but the borrowers are not drawing down the money because of apprehension [towards] the economy,” he asserted.
He further noted that it was this apprehension which was contributing to reduced investments.
Meanwhile, GMSA President Shyam Nokta recently highlighted that the 2017 Budget adversely impacted on the country’s manufacturing sector, saying that it caused a reduction in cash flow for businesses. He further indicated that measures such as the recategorising of zero & standard rated items and the inclusion of VAT on forestry products and electricity have affected the growth of the sector.