? $10B in budgetary support for GPL, GuySuCo
Government has proposed to increase the income tax threshold from $40,000 to $50,000, Finance Minister Dr Ashni Singh announced during his budget presentation in the National Assembly on Friday.
The personal income tax has been increased to $50,000 or $600,000 annually. The finance minister noted that this year?s increase in the income tax threshold is ?twice as high as it was in 2006?. He added that ?every tax payer will benefit with higher take home pay?, noting that ?some 21,000 persons will be removed from the income tax net, and over $3 billion of additional disposable income will be placed in the hands of beneficiaries?. The income tax threshold has been increased by $10,000 per month.
Finance Minister Dr Ashni Singh
Dr Singh announced too that the recipients of Old Age Pension can look forward to a mere $600 increase as they will now receive $8100, an eight per cent increase over the 2011 rate. There will also be an increase in public assistance effective May 1, 2012 by $400, taking the total to $5900. This increase represents a seven per cent increase. The finance minister stated that ?taken together, the increase in Public Assistance and Old Age Pension will place a further $350 million of disposable income in the hands of the elderly and the most vulnerable?.
According to Dr Singh, the budget projects a reduction in the fiscal deficit that is consistent with the country?s consolidated objectives, noting that several measures will be supported through this year?s budget.
Sugar sector
The minister said too that the sugar sector is poised to take off, and as such, ?we will spare no effort to ensure that the sugar industry is transformed to a viable and competitive one?. On that note, some $4 billion has been allocated from central government to the Guyana Sugar Company (GuySuCo) to ensure that the sugar industry is financially able to meet its operating and investment requirements.
?The production and financial turnaround that is expected to be aided, with this support from government and other initiatives taken by the industry, will ultimately redound to the benefit of the industry?s 18,000 workers and their families along with the industry?s suppliers of goods and services, bringing the total number of beneficiaries to 120,000.?
GPL and renewable energy
Additionally, the Guyana Power and Light Company (GPL) will receive a transfer of $6 billion from central government with the aim of cushioning ?as far as possible, the impact of imported oil price movements on domestic customers?.
?This will benefit all of GPL?s 164,000 subscribers and by extension every member of all of the households connected to GPL?s grid,? the minister stated. The electricity tariffs were last adjusted in December 2007, Dr Singh said ?at a time when heavy and light fuels were being procured at US$71 and US$109 per barrel respectively?.
Those prices have escalated by 61 per cent and 38 per cent to US$114 and US$150 per barrel respectively. The minister noted too that GPL has to carry the costs without any adjustments to its tariffs.
Legislation
Government will also be promoting projects in the area of renewable energy sources by tabling legislation to remove ?applicable taxes on equipment used for generating electricity from non-traditional sources for both household and commercial purposes?.
Those equipment include solar panels, solar lamps, solar batteries, solar generators, solar water heaters, wind turbines, water turbines, power inverters, compact fluorescent lamps and light emitting diode lamps. Dr Singh added that government?s move to have legislation in that area is consistent with the country?s Low Carbon Development Strategy (LCDS) that promotes clean and renewable sources of energy, along with energy efficiency while recognising the rising cost of energy from traditional sources.
?It is our intention to promote greater reliance on renewable sources of energy, and the use of more energy efficient devices.?
In the meantime, the finance minister announced that government will also be tabling legislation in the National Assembly to reflect its commitment to the Economic Partnership Agreement (EPA) that Guyana introduced in January 2011. ?Mr Speaker, with respect to customs duties on exports, Article 14 of the EU-CARIFORUM Economic Partnership Agreement provides that customs duties should not be applied to originating exports. The said Article 14 and Annex 1 to the EPA call for the removal of such taxes within three years of signature of the agreement.?
Dr Singh, in summing up his presentation of the budget, said that Guyana cannot be unmindful of the context to which small economies like itself ?confront the challenges of development?.
He said the current ?external environment is characterised by a virtually limitless interconnectedness that exacerbates exposure and vulnerabilities as much as it creates opportunities. The resulting uncertainty has manifested itself in considerable economic trauma for many small economies, including some in our region?.
He said too that Guyanese need to be grateful that the country has been able to traverse ?these perilous times and emerged thus far an even stronger economy?. The growth the country has achieved over the past few years ?bears testimony to the soundness and responsibility of our policies?. He noted also that given Guyana?s economic position, the country is ?at the most exciting juncture? in its economic history, and ?poised for rapid takeoff?.
?Once the large scale investment in such sectors as information technology, mineral extraction, and agriculture materialise, the implications for growth and job creation, and income and wealth generation will be vast. Needless to say, the beneficiaries will be the Guyanese
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