Granger renews commitment to VAT reduction, public servants pay hike

Jun 13, 2015 News

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President David Granger has renewed his commitment to ensure a reduction in the percentage of Value

Added Tax (VAT) as well as an increase to public servant salaries.
President Granger did this as he addressed the Eleventh Parliament on Wednesday last.
Granger said that his government will craft a long-term, national economic strategy that will ensure economic stability and social security, raise the productive potential of the economy and improve the quality of life for all Guyanese.
Specifically, the Head of State said that his government will introduce amendments to appropriate laws to reform taxation, including the VAT, to give income tax concessions to wage earners and to offer fiscal incentives on an equitable basis to all investors.
Granger, while in political opposition, spoke quite often about the need for VAT to be reduced. His then point man on financial matters, Carl Greenidge, who served in the Tenth Parliament as shadow Minister of Finance Minister, had made several appeals for the government to reduce VAT from its current 16 percent.
Greenidge had acknowledged the People’s Progressive Party/ Civic (PPP/C) administration’s argument that VAT is attached to luxury items and is burdened on the rich so the poor should be grateful. But even as he acknowledged that on the floor of the National Assembly, Greenidge read a letter by Red Thread, a Non-Governmental Organization, highlighting how foodstuff such as macaroni and necessary household items attract VAT.
He emphasized that VAT has not made the system equitable, instead it is regressive. Greenidge had noted that the previous Government failed to implement the second stage that was expected to cushion the implementation of VAT. He noted that following the implementation of VAT other taxes were expected to be adjusted.
During the President’s address to the Parliament on Wednesday, he also said that the new government will ensure that as a general rule, people who are paid only the national minimum wage will not be required to pay income tax.
He added that that government will “We shall ensure, also, that there will be no increases in income tax rates, Value-Added Tax or national insurance contributions for this financial year 2015.
He said, however, that there will be moderate increases in salaries paid to public servants and pensions paid to seniors.
Further, Granger said that government will refashion the Guyana Police Force into a more professional and better equipped law-enforcement agency and “We shall pay policemen and women better so that they are not easily led into temptation.”
The Head of State told the Parliament, and the hundreds of Guyanese who were watching his speech live, that Government aims at providing accessible and affordable housing in sanitary and safe communities, with the necessities for wholesome and dignified living, for citizens in need.  “We shall ensure that all state-sponsored housing developments are provided with recreational, educational and sports facilities in addition to basic infrastructure and services such as electricity, telephones, roads, solid waste disposal and pure water supply,” he added.
President Granger also promised to intensify education in the sciences, technology, engineering, mining, agro-processing and the arts, to expand employment and promote economic growth.
Also, he said, “We shall propose policies that provide opportunities for local entrepreneurs and investors and our huge Diaspora to develop our abundant natural resources.  We shall introduce other job-creation measures that include promoting small and medium-sized enterprises.  We will also work towards ensuring greater access to finance and capital to start new businesses.”
As he noted other steps that his government will take to ensure economic growth in Guyana, Granger committed to “place the important diamond and gold-mining industry on sound and stable bases.”
Granger pointed out that the industry has been the Guyana’s largest foreign currency earner for several years. He said that there should be no doubt “that the national economy could be significantly enhanced and the livelihood of hinterland residents and miners enriched if the industry is placed on a surer economic footing.”
Further, Granger repeated that his government will establish a Sovereign Wealth Fund, derived from revenues from forests, mines, waters, lands and other natural resources, to benefit generations to come. Indeed, the United States has advised Guyana to go this route saying that it will speak well for the country’s future.
Also, the president said that the coalition government will introduce measures which aim at achieving full employment and providing more people with job security.  Steps will be taken, he said, to create jobs, increase production and generate wealth. (Abena Rockcliffe)

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