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Items announced in Budget 2016

Winston JordonMeasures

6.1       Mr. Speaker, a range of measures are being proposed in this budget. A few are aimed at entrenching in law, concessions which are either discretionary or granted arbitrarily. Most of the measures, however, are designed to support our thrust of stimulating the economy while rekindling hope and confidence. These are essential ingredients towards attaining the Good Life. It should be noted that while the late submission of the Tax Reform Committee’s report did not allow for its wide ventilation, a number of the measures being proposed are consistent with several recommendations contained in the report.

  1. Measures in support of our programme of ‘greening’ the economy and protecting the environment

6.2       Mr. Speaker, I propose the following measures:

  1. the removal of excise tax on motor vehicles under four years old under 1500cc. These vehicles currently attract excise tax at the rate of 30% and an effective tax rate of 118.7%. With this removal, the effective tax rate will be reduced to 68.2%.
  2. the reduction of excise tax from 50% to 10% on motor vehicles under four years old, between 1500cc and under 2000cc. As a result, the effective tax rate of 152.3% will be reduced to 85%.
  3. restriction of the importation of used and/or re-conditioned vehicles to under 8 years old from the date of manufacture to the date of importation. This restriction shall be enforced from May 1, 2016.
  4. notice of intent to ban the importation of used tyres and to reduce taxes on new tyres to encourage their use. This ban will be put into effect as soon as some procedural hurdles are cleared.
  5. a ban on styrofoam used in the packaging of beverage, food and food products, except styrofoam containers of a type used for packaging frozen fish and seafood.
  6. amendment to the Customs Act to exempt all bio-degradable containers used in the packaging of food and beverages. It should be noted, Mr. Speaker, that solar panels and other equipment geared towards producing clean energy, are already exempted from the payment of customs duty.
  7. begin the consultations for the re-introduction of a broad-based, non-discriminatory environmental tax.
  1. Measure to bring equity to the charging of excise tax on alcoholic beverages

6.3       Mr. Speaker, I propose to amend the Excise Tax Act No. 11 of 2005 to provide for a new basis for the imposition of excise tax on alcohol for consumption. The intent is to introduce a graduated, specific rate system for the collection of excise tax on alcohol based on the alcoholic strength. This is deemed to be the most effective way of dealing with importers and domestic manufacturers of alcoholic beverages. It will also be easier for the Guyana Revenue Authority to administer as well as reduce significantly, opportunities for manipulating the values of the goods for the purpose of taxation.

  1. Measures to remove arbitrary, discretionary or undefined remissions

6.4       Mr. Speaker, I propose the following measures:

  1. an amendment the Regulations under the Excise Tax Act 2005, the Customs Act and the Value Added Tax Act (VAT) to exempt from the payment of excise taxes, customs duty and VAT, motor vehicles when imported by returning Foreign Service Officers who have completed official duties overseas.
  2. an amendment to the Customs Act to exempt import duty on motor vehicles imported by eligible public officers, qualifying re-migrants and settlers. The opportunity will be taken to close existing loopholes in the law that allow the abuse of the concession.
  3. an amendment to the Customs Act to exempt baggage and household effects imported within six months upon arrival of a qualifying re-migrant.
  4. amendment to the Financial Administration and Audit Act to exempt diplomatic, consular, international, charitable and non-profit organizations, semi-autonomous agencies, government departments and public corporations from the payment of want-of-entry charges, stamp duty and environmental tax.
  5. amendment to the Customs Act to exempt computer printer ink and toner cartridges for non-commercial printers.
  6. amendment to the Value Added Tax to:
    1. exempt par-boiled rice;
    2. packaging materials;
    3. other malt extracts other than ovaltine;
    4. exempt the importation of personal effects, including motor vehicles for re-migrants and settlers who qualify for exemptions from Customs duties under Section 23 of the Customs Act.
  7. amendment to Income Tax Act to:
    1. provide for the income earned by Artistes during festivities certified by the Minister responsible for tourism to be exempted from the payment of income tax;
    2. allow the Commissioner General to apply an refund towards outstanding taxes, levy, interest or penalties payable by any person and for the Commissioner General to refund any excess remaining to the person.
  1. Measures in Support of the Elderly

6.5       Mr. Speaker, I propose the following specific measures in support of the elderly segment of our population:

  1. I propose to increase the pensions payable to ex employees of Guyana Telecommunications Corporation. These pensioners have waged a prolonged struggle to get their correct pension, but were denied by the past regime. The increases will be effective from April 1, 2016;
  2. Effective April 1, 2016 Old Age Pension will increase from $17,000 to $18,200. Nearly 50,000 pensioners are expected to benefit. Mr. Speaker, in the short space of eight months, this Coalition Government has been able to increase old age pension by 38.7 percent, the largest increase in recent memory, and a testimony to our commitment to govern in the interest of all Guyanese;
  3. Effective April 1, 2016 Public Assistance will increase from $6,500 to $7,300. Over 9,600 persons will benefit from an almost 24 percent increase since this Government took office;
  4. Effective April 1, 2016 all Guyanese citizens 65 years and older will no longer be required to pay for a driver’s licence;
  5. Effective April 1, 2016 all Guyanese citizens 65 years and older will be exempt from travel tax when travelling overseas on a Guyanese passport. However, they will still be required to pay the Airport Security Tax of $1,500.

6.6       Mr. Speaker, we will continue to examine other ways of easing the burden on our elderly citizens, as they too look to enjoy the Good Life in their senior years. In this regard, we will turn our attention to the plight of former public servants and parliamentarians, whose current pensions neither reflect the years of service given nor the positions from which they retired. This is because their pensions have been substantially eroded because of depreciation of the Guyana dollar and inflation over the years.

  1. Measures to Improve Tax Administration

6.7       Mr. Speaker, I propose the following measures aimed at improving the efficiency administering taxes by Guyana Revenue Authority:

  1. amendment to the Tax Act to ensure that prior to the issuance of all licences for public use, including licences to conduct forms of trade and business, the applicant has complied with his/her obligations to file annual returns and paid, or has made arrangements to pay, all taxes due and payable.
  2. amendment to the Customs Act to provide for the non grant of exemptions to an applicant unless all outstanding tax returns are filed in accordance with the Income Tax Act, and all taxes have been paid or satisfactory arrangements have been made to pay such taxes.

 

 

  1. Measures to Enhance Revenue

6.8      Mr. Speaker, I propose to amend a raft of legislation, the effect of which is to increase the fees paid to obtain various licences. The pieces of legislation are:

  1. Regulations under the Auctioneer Act
  2. Regulations under Hucksters Licencing and Control Act
  3. Regulations made under Miscellaneous Licences Act
  4. Regulations made under the Motor Vehicles and Road Traffic Act
  5. Regulations made under the Rice Factories Act
  6. Regulations made under the Tax Act

6.9       In addition, it is proposed to amend Section 19 0f the Firearms Act Cap 16:05 to increase the annual fee for firearm licences as follows:

Type of Licence

Current Fee ($)

New Fee ($)

Shotgun

Handgun

Rifle

Dealer’s

2,000

5,000

5,000

7,500

5,000

25,000

40,000

150,000

 

 

  1. Other Measures
  2. Increase in Rebate Granted by GPL and Reduction in Prices of Fuels

6.10     Mr. Speaker, conscious of the need to provide incentives to the manufacturing sector, in order for it to become competitive, and, as a further measure to boost incomes of households, it is proposed to increase the rebate granted by the Guyana Power and Light Company from 10 percent to 15 percent, with effect from April 1, 2016.

6.11     Mr. Speaker, with effect from February 1, 2016, the prices of fuel sold by Guyana Oil Company (GUYOIL) will be reduced as follows:

 

Type of Fuel

Current Retail Price/Litre ($)

New Retail Price/Gal($)

Gasoline

Dieseline

Kerosene

190

161

120

170

150

90

 

  1. Wages and Salaries

6.12     Mr. Speaker, an announcement on salary increases for public servants, for 2016, has to await the conclusion of discussions with the relevant unions. The Government understands the disappointment this will create among public servants, but wishes to assure them of our commitment to their welfare and advancement. We ask that they give the collective bargaining process an opportunity to work.

iii.       Measures to Improve Workers’ Income

6.13     Mr. Speaker, I propose to amend the Income Tax Act to increase the income tax threshold to $660,000, from $600,000. With this measure, over 68,000 workers will be removed from the income tax roll, in addition to the fact that workers have an additional disposable income annually.