PSC welcomes reinstatement of 25-year exemption on Capital Gains Tax

The Private Sector Commission (PSC) has welcomed the reinstatement of the exemption of Capital Gains Tax from the sale of properties that were in possession of the seller for 25 years or more.
Capital Gains Tax is the tax paid by individuals who have disposed of assets and made a gain, if it exceeded the cost of acquisition of the asset, if the value at the time it was acquired exceeded the value at the time of ownership, or if the value of the asset has exceeded its market value as at January 1, 2011.
Previously, transactions which were carried out over 25 years after the date the asset was acquired would be exempted from the payment of this tax if there was a profit on the sale. But the APNU/AFC coalition Administration removed this exemption.
The coalition passed the amendments to the Capital Gains Act in January 2020, days after the passage of the No-Confidence Motion (NCM) against the Administration.

However, in fulfilment of its promise to reverse the harsh measures imposed by the previous regime, the PPP/C Government has now restored that tax. Senior Minister with responsibility for Finance, Dr Ashni Singh tabled the Capital Gains Tax (Amendment) Bill.
Earlier this month and upon the passage of the 2021 National Budget on March 4, the National Assembly also approved the amendments to the Capital Gains Act the same day.
According to Minister Singh, this bill will ensure that property owners are relieved of the draconian laws imposed by the coalition.
“As we did with so many other of the punitive tax measures that the APNU/AFC Government had put in place, we committed to reverse these punitive and draconian measures and we are now sir, delivering once again on that promise,” the Finance Minister told the House.
Now, the PSC has thrown its support behind this latest move by the PPP/C Administration to bring relief to Guyanese.
“We welcome that initiative of the Government of Guyana because it really pushes persons to invest long term and not be afraid of the tax implications for owning certain assets long term. And, really, one of the biggest long-term assets that is held in Guyana is real estate. So, [the restoration of this exemption] really helps the real estate industry,” PSC Chairman Nicholas Boyer told Guyana Times.
Back in December, Boyer had called for the reinstatement of the exemption of the Capital Gains Tax. During an interview with this publication, the PSC Chairman had explained that the removal of this exemption has not only affected the construction and real estate industries but also the desire to invest in real estate and to hold real estate on a long-term basis.
“In other words, when you have a hype right now you definitely get investments in real estate but when you get to a point where Guyana is massively built out, taxes like that will really hurt the investments and trading business within the real estate industry. So that tax needs to revert back to what it was,” he had stated.
According to Boyer, countries around the world have the Capital Gains Tax along with such an exemption in order to encourage investments into real estate.
“Guyana decided to remove that exemption and I don’t think that should be because it will stymie investments into the real estate sector. It’s also incentivising people to not report the correct sales figures and to try to find illegal ways around the taxes, and that’s not something we want. We want to encourage people to do the right thing. We want to encourage people to be law-abiding citizens and to do the legal and correct thing when investing, selling or transacting real estate,” he had contended.