Although the Private Sector was part of the consultation process which helped to shape Budget 2019, its umbrella organisation, the Private Sector Commission (PSC), has listed a number of issues it has with the coalition Government’s annual financial blueprint for the country.
The Commission said in a statement on Tuesday that it was mainly concerned about the level of proposed overall tax revenue on businesses and individuals as Budget 2019 projects a 9.9 per cent increase in revenue, while the economy is projected to grow by 4.6 per cent. “Most importantly, there is no provision for relief on energy costs, which are stifling businesses,” it said.
However, the PSC recalled that it had recommended the gradual lowering of the Corporation Tax over a period of 10 years to 20 per cent. “The PSC is, therefore, pleased at the reduction to 25 per cent which was announced for 2019 and signals a commitment to this mutual goal.”
Further, the PSC said it was cognisant of the need to incentivise the manufacturing sector and had hoped that given the large input of the services sector to Guyana’s Gross Domestic Product, thought would have been given to reducing the tax rate for commercial businesses from the draconian 40 per cent as this is having an adverse effect on legitimate businesses.
“Worrying too is the impact of Budget 2019 upon the foreign reserves of the Central Bank; an impact that does not appear to have taken cognisance of the need to cushion against external shocks to which the country and its currency are vulnerable,” the statement added.
Nevertheless, the PSC said it was pleased that Budget 2019 contained several measures such as the raising of the tax threshold, which it had proposed for the relief of the tax burden upon employees, and the monies earmarked for hinterland airstrips.
The PSC said it was also pleased that plans have been announced for the construction of the Linden-Lethem road which it said will ease the woes of businesses and residents which depend on that area for their livelihood. “The dire need for the East Bank road, which had been proposed by the Commission, has also been addressed and the Commission is heartened that the development of modern Port Georgetown is being addressed.” The PSC also was pleased with provisions for the differently-abled, a demographic which was often neglected.
Following the Budget presentation on Monday, Georgetown Chamber of Commerce and Industry (GCCI) Executive Director Richard Rambarran said that although The Private Sector was happy to see some money going back into the hands of consumers, it was extremely disappointed that the Government has made no move to remove or reduce the excise tax on fuel.
He explained that in 2018, fuel has had a rehabilitating effect on the Private Sector, because it was multipurpose. He noted that it was not only used in manufacturing, but in every other aspect of business. “It is used in distribution, it is used in just about every single aspect of the production and distribution line; and as such, there should be something, or there should have been something, which addresses fuel costs,” he noted.
Rambarran further related that the Government needed to be more serious about the development of a green economy, and not just talk about developing a green economy. He noted the lack of advancement in this area despite the Government repeatedly talking about the Green State Development Strategy.
The GCCI Executive Director also noted that the current budget presented needed to be taken within the current context of Guyana, since, according to the 2018 numbers, there has been minimal growth in a number of sectors and sub-sectors, as well as contraction in a few. However, he said that they were pleased with the measures identified which would ultimately put money back into the hands of the consumers as well as the Private Sector.
On the issue of tax reduction, he explained that the Private Sector was somewhat pleased with some of the reductions identified, but reminded that the decreases were not across-the-board.
Guyana’s Private Sector bodies have been calling on Government to cushion the effect of the excise tax on fuel prices, which affect every aspect of their businesses.
