PSC, GMSA hail Budget 2023 as ‘transformational and visionary’

Jan 18, 2023 News

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Kaieteur News – The Private Sector Commission (PSC) and the Guyana Manufacturing and Services Association (GMSA) on Tuesday praised the Irfaan-Ali led administration for the presentation of the $781.9B budget.

In separate statements, the two entities noted that the 2023 budget represents a 41.4 per cent increase from last year with no new taxes.

For its part, the PSC said that the “architecture of Budget 2023 is well-balanced and caters to the needs of all sectors, which is essential in fostering continuous growth and development of our economy, and improving the quality of the lives of every Guyanese.” The PSC said that the presentation made by Dr. Ashni Singh, Senior Minister with responsibility for Finance, should not only be seen from a financial lens but rather an “analytical, rational and logical approach to economic governance.”

“The policies proposed in Budget 2023 will have far-reaching positive impacts and implications for every citizen. It is truly a people-centered and private-sector incentive driven budget fit for the purpose of growing and developing our economy. This is evident with measures aimed at improving peoples’ net salary and addressing cost of living rise, such as the increase in the income tax threshold from $75,000 to $85,000 monthly; maintaining zero excise taxes on fuel to absorb the impact of volatile fuel prices and the reduction in freight charges by extending the application of freight cost adjustment for the calculation of import taxes for a 12-month period,” the PSC said.

Further the Commission noted that it is pleased that there are no new taxes in this year’s budget while adding that when coupled with measures such as removal of the 14 percent VAT with respect to the sale of residential properties, reduction in duty from 45% to 35% on the importation of new motor vehicles (less than four years old) below 1500 cc.; replacement of the current tax rate with a flat rate of taxes of $800,000 on used vehicles (vehicles 4 years and older) below 1500cc and the removal of the currently applicable 14 percent VAT on new electric motor vehicles, there will be cost savings to all Guyanese.

“Increased spending in the Housing Sector will translate to more lands & housing being available to the populace; this coupled with an increase in the low-income mortgage ceiling from $15 million to $20 million makes for an exciting future in this sector. The provision of digital solutions to ease public interaction with public institutions will also bring much relief to businesses and the citizenry and reduce inefficiencies in the public agencies. The budget 2023 contributes to job creation by investing in economic growth and promoting private sector development,” the PSC said noting that the Government is introducing several measures to create jobs, such as encouraging businesses to invest in Guyana, increasing the availability of credit for small businesses and creating new job opportunities in the energy and renewable energy sectors.

Moreover, the PSC said the budget also increases funding for skills training and vocational education, which will help to create a more competitive labour force. Additionally, the budget includes funding for infrastructure projects, which will create jobs in the construction sector.

“The budget includes tax incentives to help encourage businesses to expand and create jobs. Investment in education to the tune of $94.4 Billion will benefit the nation in several ways. First, it increases the number of skilled professionals, which can help the private sector to develop innovative technologies, products and services. Second, it provides a pool of qualified employees that businesses can recruit from. Third, it gives businesses access to a broader range of ideas and perspectives, which can help to improve business practices and strategies. Fourth, it can help to create a more educated consumer base, which can lead to increased consumer spending in the private sector.”

The PSC’s statement said too that the injection of $84.9 Billion into the Health Sector “is a significant leap taken by the Government in achieving a modernized health care system which is paramount in our developmental process.” Further, the Commission said it welcomes the commitment made to create a conducive environment for private sector investment in the small business sector by allocating the sum of $584.2 million towards the Small Business Bureau and the Small Business Development Fund.

“The PSC looks forward to the engagement with “the regulator and self-regulatory organizations” to identify practical actions that can be taken to promote capital market development as this would certainly encourage investors in the productive sector to consider the raising of finance on the capital market as a viable option. Of critical importance to the Private Sector is the continuous investment by the Government in infrastructure development as this provides the necessary foundation for economic growth and business activity,” the statement said.

Similarly, the GMSA described the proposed fiscal measures as “progressive and visionary”.

“The GMSA is pleased with the Government’s strategic measures that forecast diversified economic activities while grappling with concurrent challenges that continue to threaten global economic stability. A Government that effectively harnesses the resources of the country to gain adequate revenues for sustainable growth and development must be commended. The utilization of revenues from the first Carbon Credit sale in the amount of $31.3 billion, in conjunction with the transfer of Guyana’s oil profits in the amount of $208.9 billion from the Natural Resource Fund (NRF), without imposing new taxes is evidence that Budget 2023 is people-centered and pro-developmental,” the GMSA said noting that its recommendations to the Finance Minister were included in the proposed budget.

The following specific measures are key to advancing growth within the manufacturing and services sectors in particular, the GMSA said:

• $2 Billion in Agri Development which includes the establishment of a regional food hub with cold storage, manufacturing and processing capabilities.
• $300 Million in Rice development which includes the provisioning of two new drying floors in Regions 3 and 5.
• $150 Million in soya bean cultivation with the construction of a wharf in the Tacama area to further push Guyana’s targets of food security within the region.
• New facilities in Crabwood Creek and Orealla as well as new cold storage in Bartica. The acquisition of two new refrigerated trucks to support the transportation of agro products.
• $584.2 Million allocated to Small Business Support.
• Removal of the 14 percent VAT with respect to the sale of residential properties, which will also further reduce the cost of home ownership.
• $1.5 billion for the construction of a new laboratory for the Guyana National Bureau of Standards (GNBS) which will allow them to provide adequate, accurate and timely services.
• $43.3 billion to facilitate the construction of the integrated natural gas liquids plant and the 300 MW combined cycle gas turbine power plant within the Wales Development Zone and associated facilities. This project will directly cut emissions by 70 percent as well as trigger a series of major economic development initiatives in Guyana as energy costs.
• Increase in the monthly income tax threshold from $75,000 to $85,000 monthly, releasing a total of $3.3 billion into the hands of taxpayers and removing 12,000 taxpayers from the tax net.

The GMSA said while the aforementioned measures represent the progression and transformation of the country’s economy, the Association “is still hopeful for other additional measures to be extended to benefit the manufacturing sector.”

“The direct reduction in the cost of electricity as well as a reduction and removal of taxes on support services to manufacturing will greatly impact the sector, drive production and increase the GDP of our economy,” the GMSA said while expressing its commitment to working with the government on addressing and improving priority areas to aid Guyana’s development.

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• Dr. Ashni Singh, GDP, Guyana Manufacturing and Services Association (GMSA), rivate Sector Commission (PSC), Senior Minister with responsibility for Finance

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