AFC to propose drop in VAT, personal income tax

Apr 24, 2012 News

…touts budget cuts for “fat cats” at OP

The Alliance for Change (AFC) says it will be pushing for an increase in public assistance, and cuts in Valued Added Tax (VAT) and personal income tax as part of measures to be included in the 2012 budget.
Further, the party is looking to weed out super-salaried workers from the Office of the President and slash $1billion off the subsidy proposed for the Guyana Power and Light Company (GPL).
The proposal for budget cuts comes a week after the party failed to get the support of A Partnership for National Unity (APNU) for its first budget cuts for three Government Ministries. But yesterday, AFC lead Parliamentarian Khemraj Ramjattan insisted that there was no antagonism with APNU.
With the new proposals for budget cuts, Ramjattan and fellow AFC Parliamentarian Cathy Hughes were yesterday careful to state that the budget cuts would only be pursued once clear information is provided.
Ramjattan said that the party could not say definitively what super-salaries at the Office of the President his party would like to see cut. This is because the government has kept sealed the information about contracted workers.
Hughes expressed frustration that this information is not available. As far as she is concerned, the media should be in possession of it.
“But you don’t have it and we don’t have it,” Hughes said at a press conference.
The AFC wants a list of all contract workers and their salaries. This, Ramjattan said, would help the party to be more “clinical” in its proposals. However, he was also careful to state that the AFC is not proposing cuts for ordinary workers, but rather for the so called “fat cats.”
But in the absence of information on who gets what, Ramjattan said the party is left to take the “scatter bullet” approach and hope it would get the answers in Parliament.
“We do not know at this stage if we are going to vote for these cuts,” Ramjattan stated, but he said that if it is found that there are “fat cats” then the party will push ahead.
Along with the contract workers, there is a schedule on the budget of “others” for the Office of the President of $154 million.
The AFC wants to know what the “others” are about, and if it is found that these are unreasonable it would proceed to propose cuts.
For GPL, the AFC wants the subsidy cut by $1 billion, reducing the government’s proposal to $5 billion.
Ramjattan said that the AFC understands the predicament GPL is in, but added that the utility can ensure that a reduced subsidy of $5 billion covers its need.
The party has proposed that the personal income tax, called Pay As You Earn (P.A.Y.E) be reduced from 33.3 per cent. He said this reduction will cost the treasury $2.4 billion.
In addition, if VAT is dropped from 16 per cent to 14 per cent, that would cost the treasury $2.8 billion. The AFC had originally proposed a drop in VAT to 12 per cent. However, Ramjattan said the party was ready to compromise.
While these concessions would have to be leveraged by the treasury, Ramjattan said that the money could be found if the government withdraws “nonsensical” projects like a Marriott-branded hotel.
Ramjattan said that the AFC understands that APNU will also propose some budget cuts, and when that time comes the party will decide if it will lend support.
An email to the AFC’s executives by Ramjattan on the non-support of APNU for its first budget cuts proposal was leaked to the media.
Ramjattan said that his feelings, as contained in the leaked email, still stand, in that he felt betrayed by APNU.
However, he said that there is no antagonism between the parties. He said that if anyone from the government or the opposition wants to talk to the AFC on the budget the latter is willing to do so in order that Guyanese could have a “better deal.”
“We will not miss that opportunity,” Ramjattan stated.
He said that if the AFC is invited to talks with the government, it will ask for APNU to be present.
“This must not be a moment where it’s going to be disunity all over the place,” Ramjattan stated.
He said that the tripartite talks that arose out of the last elections require wisdom, maturity and also an element of give and take.
“There must be compromises all around,” Ramjattan stated.
Yesterday both the AFC and APNU submitted motions proposing certain cuts to the budget.

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