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Lower the income tax threshold- Cathy Hughes
Kaieteur News – Citing the climbing cost of living and a “heartless” across the board seven percent increase in public servants salary, The Alliance For Change (AFC) executive member, Cathy Hughes has called for a lowered income tax threshold to allow more money into the pockets of low income earners.
Alliance For Change (AFC) Executive Member, Cathy Hughes
Hughes made the call at a virtual press conference hosted by the Party on Tuesday.
In presenting her case, she explained, “At a time when inflation has reached 14 percent, a seven percent increase just does not cut it. Every household, every small business, the minibus operators, the coconut vendors, the lady selling food, everyone has been affected by the rising cost of living. Small businesses cannot adequately restock, as they have seen sales decline, while most of the cost of supplies to restock has increased (financially). Prices have increased from the most basic of food items, the cost for construction materials have gone up and for some it has doubled”.
The former Minister of Telecommunications told reporters that the administration has refused to meet and discuss salary increases with the various Unions, as they are well aware that the workers representatives would not accept increases less than the inflation rate.
She said that they resorted to forcing the seven percent down the throats of workers. But by doing this, she argued, it is the worker at the top tier that will benefit from the imposed across the board increase.
“By making the seven percent increase across the board, the Government will allow for public servants at the higher end of the pay scale to receive more on their salaries, while a pittance is added to the low income earner. At a $4,900 increase when taxes are deducted, it would not even cover the cost of a 20 pounds cylinder of gas… we need and we must do more for low income earners,” she noted.
Hughes further stated that a mere seven percent to the salary of workers after being taxed is nothing short of “heartless”. It is the most vulnerable, with low earnings that need the most assistance in this economic crisis, Hughes pointed out.
In this regard she said, “The AFC calls for an immediate adjustment to the income tax threshold that will allow for low-income earners to have more disposable income and a total review of the income tax rate for all workers and, especially, for the minimum wage to be raised”.
For the year 2021, each worker is required to pay at a tax rate of28 percent in Pay-As-You-Earn (PAYE) if they earn $195,000 and under. Meanwhile, a worker earning $195,001 and over per month will pay 40 percent of their annual income in taxes.
It is important to note that in the Bank of Guyana’s Half-Year Report is a table, which highlighted increases in the cost of food by 12.5 percent, miscellaneous goods and services by 1.9 percent, transport and communication by 1.8 percent, furniture by 1.7 percent, and medical care by 0.3 percent.
Even with consumers already complaining about the cost of living, Head of State, Dr. Irfaan Ali, during a Press Statement earlier this month warned that a further increase might be afoot, as a result of the global supply chain crisis.
Pointing to the impact of the pandemic, which caused tremendous increases in cost of living, the President noted that the closure of major players in international markets, factories, terminals, and port facilities has created severe backlogs for shipping.
According to President Ali, the delay costs are then translated into new prices that consumers are facing globally. He said, “So the net effect of all of this is increased costs at the production level and increased costs at a logistics level, and that combined increase is what is driving up prices globally, and Guyana is not excluded from this phenomenon.”
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