Eating political humble pie…and muted criticisms of the Budget

Dec 03, 2017 AFC Column, Features / Columnists

When Finance Minister Winston Jordan had presented the 2017 budget in Parliament, he was mercilessly hammered by the PPP, the private sector, civil society and a string of other groups, all complaining about a slew of tax measures which were aimed at righting an economy that had clearly gone astray under the PPP.
Opposition Leader Bharrat Jagdeo publicly said that “in all my lifetime this was probably the worst budget I have ever seen, the budget that brought the most taxes in the history of our Country.”
That was moments after Minister Jordan had completed his presentation.
Well Mr. Jordan did the same thing earlier this week and Jagdeo was forced to eat political humble pie and to mute his criticisms. There were no more statements about it being the worse slew of measures and policy plans in history. This time, he was forced to severely tone down his political rhetoric as large sections of society, the private sector, the private schools industry, the tourism sector and numerous other segments of society celebrated instead of attacking.
Mr. Jordan and his team had listened to lobbying from the private sector about what they would have liked to see in the budget. From all appearances, they got some of what they asked for.
For example, the Guyana delegation to the Caricom Trade Ministers conference applied for, and won, the backing of other countries to slap a hefty increase on the import duties of American and Canadian pinewood exports to Guyana.
Natural Resources Minister Raphael Trotman had joined with the forestry sector and producers to point to mounting evidence of price dumping on the Guyana market by North American suppliers. That imported pinewood was attracting only a five percent import tax was ridiculous to say the least. The lobbying from Guyana at the Council for Trade and Economic Development (COTED), ensured that Guyana was permitted under the rules in the regional single trading market to hike the duty to 40 percent from the beginning of next month.
The 40 percent duty will run for 24 months, ending on December 31, 2019. If by then, foresters still think that imported pine is disadvantaging them, then all Messrs Jordan and company have to do is to reapply to Caricom to exploit a single market rule that “protects an indigenous industry that is under stress.”
So it is no surprise then that the Board of the Guyana Forestry Commission has come out in support of the latest policies and protection measures for the sector, saying in a statement this week that measures like the one linked to pinewood were had directly from representation to Government.
“We are confident that they will further support the development of Guyana’s forest sector, especially in terms of competitiveness, growth and boosting the sector’s ability to manufacture quality, value added products and enhance its profitability.”
In relation to education, further proof that the Coalition Government is willing to listen to representation from stakeholders and act accordingly to their benefit, came in the form of the lifting of the tax on private education.
The proof in the pudding now going forward would be whether schools would revert to original semester or academic term prices now that they don’t have to add VAT and remit it to the GRA, and thence to the Consolidated Fund.
There were numerous other goodies in next year’s budget, and even though some critics have already begun to say that the budget is geared to “winning hearts and minds”, many will be happy with measures like the ones relating to tourist and public transport buses.
Vehicles operating in Regions One, Seven, Eight and Nine will get licences free of cost and VAT on vehicles less than four years old carrying 21 persons or more has been lifted. This will likely benefit a number of sectors ranging from tourism to timber, to overland transport among others.
Additionally, vehicles from 2,000-3000 cc and less than four years old will attract no excise tax, which was previously rated at 110 percent. Now it is zero. For vehicles up to 4000 cc, the tax on this comes down from 140 percent to zero. Astonishing right?
“I know the folks in the tourism sector will finally get some progress in terms of those duty-free concessions on vehicles that they need to transport tourists in out tourism-related areas,” Former Tourism but now Public Telecommunications Minister Hughes said in reaction to these measures.

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Eating political humble pie…and muted criticisms of the Budget

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