Despite Opposition’s contentions… Panoramic view of economy shows positive growth due to dynamic reforms – Finance Minister

Jul 27, 2019 News

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Contrary to the claims of the political opposition, Finance Minister Winston Jordan is maintaining that a panoramic view of the economy shows that there has been positive growth in the last four years.

Speaking at the Linden Business Summit that was held on Thursday, Jordan noted that due to the government’s bold and dynamic approach to economic reforms, Guyana recorded positive growth, while pointing out that in 2018 in particular, there was real growth of 4.1 percent. The Finance Minister highlighted that this was the highest over the past four years and even the highest since 2014.
Making reference to recent statements by the International Monetary Fund (IMF) – an impartial observer – Jordan said that this body clearly stated that Guyana’s 2018 growth was spread across most sectors. It was to a large extent due to the energy and enterprise of private sector participation the Minister stated.
Jordan also reminded of a recent report of NASDAQ, the second-largest stock exchange in the world by market capitalisation, which listed Guyana at number one among the five fastest growing economies in the world.
With this great outlook for the country, Jordan said it is truly amazing that some continue to peddle misinformation about the state of the economy and of its future.
The Minister said, “For too long, we have allowed a small, but influential group, to paint a negative picture of our country. It is time we change that narrative and begin to champion that panoramic view that shows the immense potential of this country, in general, and Linden, in particular.”
The Finance Minister said, “We recognise the grave challenges we have to face and overcome. From the very beginning of our term in office, our Government identified as a national priority the imperative of bridging the coast with the hinterland, of the need to achieve balanced growth among our regions. In that framework, we recognise that, in spite of the progress made, there is a lot more that needs to be accomplished…”
ECONOMIC REFORMS
Returning to his earlier remark of economic reforms, Jordan proudly stated that his government has taken the courageous step of establishing a welcoming economic environment for all, not a select few, as what took place in the past. Among the government’s notable achievements in this regard, he said, is a comprehensive reform and simplification of the tax system.
The Minister reminded that there was a reduction in Company T ax for non-commercial companies from 30 percent to 25 percent; reduction in the Value Added Tax from 16 percent to 14 percent; increase in the VAT threshold from $10 million to $15 million; implementation of a special income tax rate of 25 percent for Small Businesses in addition to the numerous concessions available to such businesses under the various Tax Acts; increase in the threshold for filing a property tax return from $0.5 million to $40 million, and reduction in the property tax rate on chargeable property.
Further to this, Jordan said that there was an exemption from Customs Duty, Excise Tax and VAT on a range of capital equipment, intermediate and consumer goods; removal of the remaining restriction on accessing the Export Allowance to “soft currency” areas in Caricom; and the introduction of easier processes that allow individuals and companies to get refunds of taxes from the GRA.
At the individual level, the Finance Minister noted that the Government has reduced the personal income tax from 30 percent to 27.5 percent, increased the personal income tax allowance from $600,000 to $720,000 or 1/3 of gross income, whichever is higher; removed income tax from the employee’s contribution to NIS; and gave equal treatment to Vacation Allowance across the public and private sectors.
While these business-specific reforms have been direct, the economist said that the tremendous increase in Government’s expenditure on health and education, housing and water, and the physical and economic infrastructure, while maintaining low, single digit inflation and a relatively stable and free exchange rate; and rigorous measures to fight corruption have contributed immeasurably to the facilitative climate for investment in Guyana.
And weaving all these into a strong, durable fabric, he said, is the Green State Development Strategy (GSDS) which, in turn, is linked to the Sustainable Development Goals (SDGs). He said the Government aspires to achieve the SDGs by 2030.
The Finance Minister also noted that other reforms have extended to measures aimed at greening our economy, including the imposition of an environmental levy; the banning of styrofoam used in the packaging of beverage, food and food products; removal of taxes on bio-degradable containers; the waiver of all taxes on motor cars and motor cycles; the lowering of taxes on new vehicles and tyres; the restriction on the importation of re-conditioned vehicles; and the banning of the importation of used tyres.

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