Budget Debate…21,000 taxpayers taken off radar- Minister Ali

Apr 11, 2012 News

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By Leonard Gildarie

The Parliamentary debate on the 2012 National Budget, already spiced up by the minority position of the ruling People’s Progressive Party/Civic, had promised to be anything but run-of-the-mill. At least, that much was promised by the opposition parties – A Partnership For National Unity (APNU) and the Alliance For Change (AFC) – and the billing lived up to its name.
Yesterday, the debate got underway with APNU’s financial pointman and former Finance Minister, Carl Greenidge, making an hour-long presentation.
This year’s debates will represent the first time since ascending to power in 1992 that the PPP/C is facing the real prospect of not having its budget automatically passed. Its majority no longer exists , and it was the opening task of Irfaan Ali, Minister of Housing and Water, to warn opposition that voting against measures in the budget would be tantamount to voting against development of the country and its working class and being judged by them.
According to Ali, it was the same Greenidge who oversaw “a dark period in Guyana’s financial history in the ‘80s”.
“Fast forward to 2012, Guyana is experiencing growth of over 4% as against escalating debts in that period,” Ali stated. There were heckles of “mansion” as this reference was cited by the Housing Minister..
“It is not true that government’s tax measures over recent years, including the Value-Added Tax (VAT), have been making life harder for Guyanese,” Ali insisted. “The figures will show that VAT’s percentage in total revenues collected by the country has been declining – in 2011 that number dropping from 32% to 26%.”
“Since its introduction, there have been claims that VAT has been a main cause of consumers, especially the working class, being doubly taxed. As a matter of fact, the raising of the income tax ceiling up to $50,000 will see 21,000 earners falling off the tax radar,” Ali told members of the House
Speaking of transparency and accountability, the Minister listed a number of examples, such as the sale of Demerara Woods Limited which he said, under the People’s National Congress, was sold to an Englishman for 9.7 million pounds, and was later resold for 61 million pounds. This prompted one PPP/C Parliamentarian to utter a clearly audible “oh shucks”.
Then, he noted, there was the sale of a state-owned paint company to a private businessman for US$1.15M despite staffers offering G$150M for the operations. The businessman was given a deal to put down US$200,000 and interest rate of 6% to pay off the rest when comparable interest rates at the time were a hefty 35%. “It is the same people who are now accusing the PPP/C of not being accountable and transparent,” Ali asserted.
Guyana’s finances have improved, he said, pointing to the huge investments in the agriculture, mining and quarrying, among other areas.
“Housing mortgages have all been adjusted drastically to a home owner now having the opportunities of paying just over 4%. Against this background, Guyana has met the UN’s goals to reduce poverty with measures that improve nutrition and child health.
This year, government has allocated $2.6B for creating jobs in the emerging ICT sector; $3.1B for the laying of a high speed internet cable. This will translate to thousands of jobs and the eventual distribution of 90,000 laptops to poor families. We will achieve 100% IT literacy in Guyana,” the Minister said assuredly.
He continued: “The promise of growth in the economy will come amidst pledges by several mining companies to invest around US$1.6B in coming years, in bauxite and gold mines. It will also come with ongoing plans to establish tourism investment zones.” There were immediate cat-calls and table-thumping at this assertion.
According to Minister Ali, there has been an increase in tourist arrivals, “good news for Guyana when tourism arrivals are down in the Caribbean”. The opposition wondered whether the tourism figures included families who came for funerals as well.
Regarding the old age pension, Ali noted that government is still not “satisfied”. The recent $600 increase as announced in the budget cost government $400M. “With 42,000 pensioners and the life expectancy rate moving from an average of 59 years to 70 years, government has to balance political ambition with reality,” the Minister cautioned.
This year also, government has allocated $3.6B to housing. Between 1993 and 2009, over 80,000 house lots were distributed countrywide, he said. Miles of roads in the housing schemes, 200 core homes for the vulnerable and 200 more for hinterland communities are all part of the plans as catered for in the 2012 budget.
The budget also boasts of no new taxes and increased social benefits for Guyana, he said.

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