President Ali announces: $200K cash grant to each household

Oct 11, 2024 News

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– $10B injection for NIS, range of other measures

By Shania Williams

Kaieteur News – Amid the crushing load of poverty coupled with high cost-of-living, President Irfaan Ali on Thursday announced a one-off cash grant of $200,000 for every household in Guyana during his address at the 12th Parliament Special Sitting of the National Assembly.

This initiative, which will inject $60 billion into the economy, is expected to commence immediately as authorities establish a fair and transparent distribution process, Ali said to thunderous applause from government Members of Parliament. Outside of the House, members of the Opposition who boycotted the sitting staged a protest highlighting the cost-of-living crisis here as well as accusations of corruption against the administration.

President Ali emphasised the commitment of the Government to prioritise the welfare of all Guyanese, noting that since taking office, the administration has implemented various measures to enhance disposable income, including the removal of over 200 taxes and fees imposed by the previous government, such as VAT on water, electricity, and basic food items.

Additional measures include: the removal of excise tax on fuel, which saves consumers over $90 billion annually, an increase in the low-income mortgage loan ceiling, and the elimination of taxes on residential use of data. Last year, a $5 billion cost-of-living allocation provided public servants, teachers, and members of the disciplined services with a $25,000 one-time tax-free cash grant. “This is how we are promoting prosperity, ownership, and the distribution of wealth… The resources and revenue of this country are being spent every single day to lift the lives of people,” the President stated.

Vice President Bharrat Jagdeo later at a news conference addressed concerns surrounding what will constitute a “household” for the cash grant distribution. He referenced the last national census, which recorded 264,000 households, but acknowledged that the census may not have captured every individual. Jagdeo announced that the government plans to rely on data from utility companies, such as Guyana Power and Light (GPL) and Guyana Water Inc. (GWI), to determine eligibility.

Jagdeo explained, “We have about 200,000 people who pay electricity rates who are on the GPL database…So clearly, if someone is paying their electricity bill that is going to be a household.” He also noted that while verification may be straightforward in some regions, utility data alone may not suffice to ensure fairness. He stressed the importance of rigorous scrutiny to prevent misuse of the system, with the Auditor General’s Office involved to maintain accountability. He noted, “We try to see as far as possible how we can make it fair without people ripping off the system too. So we still have to work it through in great detail, but we believe we can do it… The aim is once it is a legitimate household. If you have a bill, that will be easily accessed,” Jagdeo noted.

Additionally, Jagdeo announced that non-nationals are not eligible for the cash grant, stating, “These are Guyanese families; if you are not a Guyanese household, you are not getting the money.”

However, Jagdeo pointed out that the database will not include residents in Regions 1, 7,8,9 and other riverine areas on the coast. In these cases, Jagdeo explained that these household are easily verified, noting that the villages are small and they will attain verification by the Toshaos in those communities.

In households that can be easily verified through utility bills, where multiple families may reside under one roof, payments will be shared first. For secondary households, such as rented homes in rural areas, additional measures will be implemented to confirm household identification. Vice President Jagdeo explained, if a person has multiple buildings, and their name appears on the relevant utility meters, tenants in such households would need to claim the grant separately. “So if you can prove that people are renting, you show that you are renting, then that’s an easy way that you have your own households,” Jagdeo confirmed.

Meanwhile during his address, President Ali announced that electricity costs in Guyana will be reduced by 50% before the end of 2025, contingent on the Gas-to-Energy project. This measure is expected to inject $250 million into the economy and significantly enhance disposable income for citizens.

“This is an injection of $250 million by the government of Guyana that will positively impact disposable income,” President Ali stated. He highlighted previous challenges faced by Guyana Power and Light, which struggled to meet increasing electricity demand from 2015 to 2019 due to insufficient inventory and investment.

President Ali further revealed plans for public sector employees to earn no less than $100,000 monthly by the end of 2025. He stated that adjustments to salaries for various public sector categories, along with an increase in the income tax threshold from $65,000 to $100,000, will benefit many workers. “This will see the disposable income of these employees increasing by more than 1 billion. This is how we build prosperity; this is how we reduce disparity and this is how we build equity in the system,” the Head-of-State emphasised.

To support families, the government will introduce a new income tax deduction allowing parents to claim an additional $10,000 per month for each child, effective next year. “This will increase the tax-free threshold for families with children,” the president explained.

Ali explained that for every child, one of their parents will be entitled an additional income tax threshold of $120,000 more than what they would previously have. Jagdeo also explained at his press conference when asked if it will be deducted from the government agency monthly or yearly. He explained stating, “so once they get the code that they are eligible, so the same way how they apply the exemption, so it has to be on a monthly basis because you pay your taxes which is deducted on a monthly basis; for example, you are earning a $120,000 a month, you get two kids, you get a code and you are now eligible of deductibles  for two kids.  The threshold how is $100,000 so you have to now pay taxes on the $20,000 because tax free threshold is $100,000 so your tax-free threshold now goes up to $120,000 so then you don’t have to pay any taxes.”

Moreover, a $10,000 universal health care voucher will be available for every Guyanese citizen in 2025, benefitting over 500,000 individuals and involving an investment of over $5 billion in public health. The voucher will cover basic medical tests essential for establishing health data and minimizing the spread of non-communicable diseases.

“The universal health voucher will help us as we work to build a healthy, strong and resilient population,” President Ali emphasised. Lastly, President Ali announced a $10 billion one-off injection into the National Insurance Scheme (NIS) to support individuals facing challenges in receiving their entitled benefits. Details regarding this financial support will be outlined in next year’s budget.

“This would allow contributors who would not have met the requirement to benefit from a cash injection that will support a better quality of living for them and allow them the opportunity of benefitting from their contribution,” the president highlighted. This initiative will benefit over 3,800 individuals.

(President Ali announces: $200K cash grant to each household)

 

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• Author Chung conference center, budget 2025, household, Parliament, President Mohammed Irfaan Ali, Toshaos

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