AFC wants 8% salary increase to be non-taxable

Nov 21, 2022 News

– says minimum wage should be boosted to $150,000

Kaieteur News – Adamant that the current rate of inflation will ‘eat into the meagre’ increase imposed on Public Servants, the Alliance For Change (AFC) is arguing that the eight percent increase should be non-taxable. In fact, the party believes there is urgent need for the minimum wage to be increased for both the private and public sectors, to at least $150,000 per month.

AFC Leader, Khemraj Ramjattan

The AFC’s Leader, Khemraj Ramjattan made the call during a virtual Press Conference on Friday. He said, “There can be no excuse this time around that the coffers are empty. The Coalition Government left the PPP with an oil bonanza that today is effectively US$1.5 billion.”

In arguing his point of view, he went on to state, “The effect of present day inflation on the purchasing power of Public Servants requires more than the 7% and 8% increases the PPP Government unilaterally has granted. Inflation rates, which is estimated to be over 10% this year and even more last year, have eaten into the income of Public Servants, and hence superior increases, rather than 7% 2021 and 8% in 2022, is what our Public Servants deserve.”

The party believes that an across-the-board increase widens the gap in income inequality among the various salary scales and that the increase in salary should be non-taxable. Ramjattan said during the Coalition’s tenure, no increase in salary was taxed, as he calculated, that should the 2022 increase be taxed, Public Servants will actually be left with a 5.12 percent increase.

He was keen to note, “We have to take into consideration what it is that is a liveable wage and we have emphasized that it ought to be a minimum of $100,000 per month and that was since 2021 when we asked that there should be an across the board minimum for both the private sector and public sector (of) $100,000.” This amount he estimates would have climbed to at least $150,000 presently.

As such, he demanded that the minimum wage be increased to $150,000 monthly for workers employed by the private and public sectors. Ramjattan reasoned that employees’ rent, food, cost to take care of children and inflation are among some of the factors that must be taken into account when considering a salary increase. He believes this was not done by the PPP.

The former Minister of Public Security under the previous administration therefore emphasised that any increase should offset the inflation rates, meaning, a citizen should be able to purchase the same amount of goods he or she did before despite the rise in prices, as their salary would be sustainable enough to do so.

On Thursday last, President Irfaan Ali announced an eight percent across the board wages increase for public sector employees, retroactive to January 1, 2022. He also promised to make another announcement for members of the joint services and healthcare workers this week. Ali’s announcement comes even after the state workers were given seven percent last year.
Already, several workers’ unions and even members of civil society have voiced their concerns regarding the ‘meager’ salary increase.