…as GCCI cites lack of job creating investments
Despite lauding Government for removing several measures that were imposed on the Private Sector, the Georgetown Chamber of Commerce and Industry (GCCI) has raised several burning concerns that it believes were not addressed in Budget 2018, including job investments.
In a detailed press statement issued on Wednesday the GCCI said it was hopeful that a clear plan would have been articulated on the way forward for job creating investments, or facilitation of job creating investments.
The Chamber also noted that there was no elaboration on a strategy to absorb workers who would be displaced by Government’s attempts to divest the Guyana Sugar Corporation (GuySuCo).
Describing this as worrisome, the GCCI said, “Government’s efforts to address the economic and social malaise stemming from this divestment were reduced to three sentences in a paragraph.”
The body further noted this was great cause for concern given the industry’s importance and material impact on the economic livelihood of many communities.
Another concern raised by the GCCI is the fact that Budget 2018 did not detail fiscal policy initiatives to provide stimulus to some main sectors of the economy, especially in light of no reduction in the corporate income taxation rate, personal income tax rate or raising of the tax threshold.
Touching on the impending oil and gas sector from which Government said most of its Foreign Direct Investments would derive, the GCCI was anticipating more new initiatives.
The GCCI was expecting more to be said about the Private Sector’s role and recent developments on the Sovereign Wealth Fund (SWF), especially when considering the importance of the SWF to the creation and promotion of a resilient economy.
“This becomes more worrying as Guyana moves closer to the production of oil in 2020 and remains, by the Minister’s (Winston Jordan) own admission, vulnerable to external shocks and fluctuations in international commodity prices,” the statement added.
With these expected vulnerabilities, the Chamber had expected some emphasis to be placed on the promotion of the agriculture sector, particularly through a suitable incentive regime.
Despite all these concerns, the GCCI, however, stated its satisfaction with the move to reverse the Value Added Tax (VAT) on education, the reduction in the tributors tax for miners from 20 per cent to 10 per cent, as well as the exemption of VAT on the supply of logs and rough lumber in the forestry sector.
“We also saw the reduction of deposits to Guyana Revenue Authority (GRA) for contested assessment reduced to one third of contested amount for Board of Appeal and Judge in Chambers. The GCCI views the Minister’s consideration and incorporation of the measures as particularly encouraging and hopes that this dialogue can extend into the future and other areas of policy-making.”
Fundamentals
Meanwhile, the umbrella body for the Private Sector, the Private Sector Commission (PSC) questioned whether Budget 2018 would address the fundamentals of stimulating growth and employment in the productive sectors and supporting micro, small and medium enterprises.
The PSC said in a statement that the reallocation of resources, the reduction of inequality in income and wealth, ensuring economic stability, the management of public enterprises, and reduction of regional disparities are all issues that should have been addressed in the Budget.
While noting that it may be too early for the Commission to offer a comprehensive analysis of the Budget, the PSC said, “The question is to what extent has this budget addressed these fundamentals?”
“We recognise that the measures in the current Budget will have a positive impact on local businesses, however, we believe that this budget is distinctly absent those measures necessary to sufficiently reverse the negative impact of the measures in the 2017 Budget,” it added.
The PSC cited the change of the tax policy from zero rating to exempt and standard-rated goods and services, the VAT on electricity, and the VAT on agricultural and mining machinery and inputs.
However, it said it was disappointed that there was no clear policy enunciated for addressing a projection on the level of corporate taxation, based on which the business community can reasonably plan future investment, a recommendation that it had urged the Government to embrace.
Importantly also, the Commission said it was surprised that the Budget did not devote a great deal more than seven paragraphs to the preparation of Guyana for an event which would hugely transform the future of the nation.
“It is obvious that our Government should already be engaging the services of industry experts to negotiate and engage, as equals, with the multinationals such as Exxon. The Budget is, however, peculiarly silent on this need to build our capacity,” it opined.
