GEORGETOWN, Guyana– The Guyana government Wednesday presented a GUY$552.9 billion (One Guyana dollar=US 0.004 cents) tax-free budget to Parliament, providing funding for a series of sectors here country seeks to continue building on the 19.9 percent economic growth achieved last year.
“It (budget) is fully financed with no new taxes,” Finance Minister Dr. Ashni Singh said as he delivered the third budget in 18 months, telling legislators that the economic growth was due mainly to the oil and gas sector, with the non-oil sector growing at a rate of 4.6 percent.
Singh said the economy is expected to grow by 47.5 percent this year, with the non-oil economy growing by 7.7 percent.
The government also announced tax reductions to improve business competitiveness, promote local content, and support job creation.
Regarding the importation of new motor trucks of any tonnage for transport of goods and less than four years old, Singh announced the removal of the 10 percent excise tax and the 14 percent value-added tax (VAT).
He said about the importation of new haulers for pulling containers or similar vehicles for drawing; the government is removing the 14 percent VAT.
“New double-cab pickups below 2000 cc will see the removal of the currently applicable 10 percent excise tax altogether, while for new double-cab pickups between 2000 and 3000 cc, there will be a reduction of the excise tax from 110 percent to 75 percent,” he said, noting that about the importation of new single cab pickups below 3000 cc, the government will remove the currently applicable 10 percent excise tax while reducing the cost of cranes, safety equipment, and oil spill equipment.
“Still on the subject of improving the competitiveness of Guyanese businesses and enabling them to ramp up their equipment fleet, we will also remove the 14 percent VAT on cranes, safety equipment, and oil spill response equipment, all as part of ensuring that as many Guyanese businesses as possible can equip themselves accordingly,” Singh said.
The government is also removing the two percent withholding tax on resident contractors implemented by the previous government.
“This tax severely affected the liquidity of resident contractors and, therefore, undermined their competitiveness. It also proved challenging to administer, with very uneven compliance, particularly outside the Central Government. We will, therefore, remove this two percent withholding tax on resident contractors”.
Singh said that these measures will cost an estimated two billion dollars and will make an essential difference in ensuring the competitiveness of Guyanese businesses and thereby help create jobs.
He said that the government is to increase old-age pension from GUY$25,000 to GUY$28,000, saying this will place an additional GUY$2.3 billion of disposable income in the hands of 65,000 old-age pensioners.
Public assistance is proposed to be increased from GUY$12,000 to GUY$14,000, benefitting 18,000 persons and providing a further GUY$432M in disposable income to those individuals, Singh said, announcing a series of other public assistance grants.
Delivering the fiscal package titled “Steadfast against all challenges, resolute in building our One Guyana,” Singh said the Irfaan Ali government is mindful of the severe challenges that continue to beset both the global and domestic economies, including the coronavirus (COVID-19) pandemic, climate change and the massive floods across the country this year.
He told legislators that the budget is geared at ensuring that the country’s “urgent developmental needs” are met in the shortest possible time while still protecting the long-term economic progress.
This is the first fiscal package that includes financing from the oil sector through oil revenues in the Natural Resource Fund (NRF). Singh said that the administration has also tapped into a US$54 million package from Norway, combined with investment income, to build two major drainage channels in Region Five and Six to provide significant flood relief to the coast.
The funds from Norway have come through the landmark Guyana- Norway partnership under the Low Carbon Development Strategy (LCDS). Under the partnership, Norway signed a deal for USS$250 million once Guyana’s deforestation rates remain intact.
In his presentation, Singh said the gold mining subsector represented 8.8 percent of the country’s economic output last year. This sector is expected to contribute significantly to the economy against this year.
“Significant growth can be expected from the subsector in 2022, with gold declaration envisaged to continue to be dominated by small and medium-scale producers,” Singh said, adding that these producers are operating 1,054 small-scale mines and 25-medium scale mines.
Gold output was the third-largest non-oil sector of the local economy in 2021, accounting for more than 60 percent of the country’s total non-oil export earnings. Singh said that the country’s total export earnings were more than four billion dollars last year.
The government also announced that it is providing an additional six billion dollars to support the Guyana Sugar Corporation’s (GuySuCo’s) ongoing investment in field and factory operations. It seeks to turn around the industry by reopening several estates this year.
The new funds bring total budgetary support to GUY$17 billion, with Singh announcing that the government will continue to consider the possibility of engaging private investor interest in some of the estates.
“Looking ahead at 2022, strategic investments will be made at Albion, Blairmont, and Uitvlugt to upgrade and mechanize where appropriate the field operations, and expand packaging capabilities to produce more value-added products for our domestic and international markets,” Singh said, adding that the government’s commitment to the sugar industry remains.
“Mr. Speaker, diversifying the sugar sales mix to maximize earnings; re-engaging previously displaced workers; and repositioning the industry on a sustainable path to profitability. Since taking office in August 2020, the focus has been on the rehabilitation of assets and retooling of the estates.
“The Guyana Sugar Corporation will be concentrating its marketing efforts on shifting from the low-value bulk-sugar markets to more bagged and packaged sugar products. To this end, these products will increase from 34 percent in 2020 to 64 percent of total production in 2022,” the Finance Minister said.
The government is also providing GUY $300 million to the Small Business Development Fund, with the Finance Minister indicating that the government will establish an e-commerce marketplace to market goods and services.
“Small businesses have the potential to strengthen communities and the local economy as a whole,” he added.
The government has allocated GUY$76 billion to cater for the construction and upgrades of critical roads and bridges this year.
“We recognize that one of the most severe irritants regarding the roads network right now is the congestion on the East Bank Demerara corridor. We have committed to resolving this… a new four-lane highway linking Mandela Avenue to Haags Bosch is currently under construction and will be completed in the first quarter of 2022,” Singh added.
“Another critical intervention included in budget 2022 is an allocation of $3.3 billion to finance improvement and enhancement of the aesthetics of the environment across major urban areas in our country, with a particular focus on the capital city.”
The administration has said that with ongoing work to upgrade the Cheddi Jagan International Airport CJIA)t, it has allocated GUY$600 million to rehabilitate and maintain hinterland airstrips at Eteringbang, Karisparu, Paruima, and Ekereku Bottom.
“Given the emphasis on hinterland development and the domestic tourism product, it is important that we upgrade and enhance the services provided by our hinterland airstrips and aerodromes,” Singh said, adding that GUY$927 million for the CJIA.
The government is providing a total of $73.2 billion for the health sector, with GUY $12.4 billion to be spent on developing six new hospitals across the country.
“These regional hospitals are expected to catapult healthcare delivery beyond current levels provided by existing regional facilities as well as to reduce the undue cost and burden of referrals to the Georgetown Public Hospital Corporation (GPHC),” Singh said.
Singh also announced GUY $74.4 billion had been allocated to improving access to education and education, with GUY $29.4 billion going towards the energy sector in 2022.
Most of the funds, GUY $20.8 billion, will be channeled towards developing the Wales Gas-to-Energy project.
Singh told the National Assembly that the government is pursuing its goal of reducing the cost of electricity by over 50 percent in the next five years.
The training of police officers and boosting the capacity of the Guyana Fire Service are part of the numerous initiatives catered for in the GUY’s $47.9 billion allocations for public safety and security. Singh said GUY $2.5 billion has been allocated to expand the Safe City Programme beyond the boundaries of Georgetown, resulting in the entire country being connected to CCTV cameras monitored centrally and at Regional Command Centres to be established across the country.
The government is providing GUY$2.2 billion to sports.
and then 