Private Sector makes pitch for economic stimulus in 2018

In a bid to revitalise an economy even the Government has admitted has slowed, the Georgetown Chamber of Commerce and Industry (GCCI) has proposed a number of bold measures for individual sectors.

Among those measures is a stimulus package for each economic sector — an idea it was able to pitch to Finance Minister Winston Jordan during consultations for budget 2018.
Speaking about its proposals, which formed part of a report the chambers submitted to Jordan, Chamber President Deodat Indar said the private sector is seeking the removal of VAT from electricity and water.
“For example, the forestry sector has gone down 18 per cent in the first half of the year, but that has gone down on further drops over the past two to three years. So they’re taxing all manner of lumber. We’re asking for the VAT to be removed. We’re asking for the VAT to be removed from electricity, water, education.
“The other industry we have is the sugar industry,” Indar said, during a recent press conference.
He added that another sector that needs stimulus is the sugar industry, adding that shutting down estates would lead to economic harm that would be difficult to recover from.
According to Indar, the job losses that would result from closing the estates cannot be mitigated by the other sectors. He noted that with less people working, spending and consumption would drop. This would result in reduced importation and manufacturing.
“So it’s a whole spin-off of issues you have there. (In) the rice industry, we asked for VAT to be removed from herbicides, pesticides and fertilizers. We have numbers to show us the small farmers are hurting. We have had complaints from them when we go out into the rural areas,” he explained.
“We want to ensure we have a Sovereign Wealth Fund set up as early as possible to deal with any revenue coming in from the oil and gas sector. He (Jordan) promised that sometime in mid-2018, we would have a first draft,” Indar revealed.
It is understood that, in the written proposal, the GCCI also called for a drop in the Tributors tax, from the 20 per cent the Government imposed to the original 10 per cent. It has also called for an incremental drop in corporate income tax to 25 per cent.

Economy
The Finance Ministry’s half-year report was released in July. It had showed contractions in certain sectors when compared to the corresponding period in 2016. The declining sectors had included sugar, livestock, forestry, mining and quarrying, and even the bauxite industry.
It showed that sugar production was recorded at 49,606 tonnes at the half year, and when compared to 56,645 tonnes during the first half of 2016, represented a decline of 12.4 per cent. The livestock industry also contracted by 10.9 per cent in the first half of 2017 due to heavy rainfall severely affecting production, especially in the second quarter.
The forestry industry also showed an 18.2 per cent contraction in the first six months of 2017 compared to the same period in 2016. Declining production within the forestry industry was due to structural changes in the industry.
The mining and quarrying sector contracted by 4.0 per cent during the first half of 2017. Gold production fell by 1.7 per cent to 317,096 ounces in the first half of 2017 compared to the same period in 2016. Also, it showed the bauxite industry declined by 11.5 per cent as a result of reduced production of higher valued grades.
The report coincided with the trial period for the broadened imposition of a 14 per cent Value Added Tax on production in these sectors — even the education sector.
In addition to the GCCI, groups like the Guyana Gold and Diamond Miners Association (GGDMA) and the parliamentary opposition have called for a reversal of the tax.