§ -Budgets
should not be reviewed in isolation, but rather as a continuation of
government’s economic and development programme during its current period of
office. With that being said, this budget can be summed up as a continuance and
extension of the previous two budgets under the Donald Ramotar administration.
§ -With the
above context under consideration, this budget can be described as steady,
attractive and people friendly building on the achievements of its
predecessors.
§ -We in the
private sector would have wanted to see more initiatives that increased
consumer spending and provided savings for the private sector to reinvest into
the economy through expansion and new activities. We would have wanted to see a
drop in corporate taxes to around 5%, which was done two years ago and even though
some had feared a drop in revenues as result, we saw that last year, corporate
tax collection increased by 16%. Also, the PAYE income tax rate should have
been reduced further. Last year, as a result of the 3 1/3 percent reductions in
this rate, the economy lost around $1 Billion in revenues. The government could
have further reduced that rate another 3 1/3 percent and look at other ways of
offsetting the revenues lost. Another initiative the government could have
considered is reducing the high tariffs on imported meats (Chicken, Beef, Pork)
so that prices for those commodities on the domestic market could reduce and
save consumers billions in disposable income annually.
§ -Reassuring
to see that current government revenues went up by 4.8% and specifically, tax
revenues increased by 7% to $126 Billion.
§ -While tax
changes have to be implemented gradually, it is important that the government
is guided by a comprehensive tax reform proposal. This proposal should be
shared with the entire population so that everyone knows what to anticipate
over a number of years as it relates to tax reform.
§ -FDI
receipts reduced by US$79 Million in 2013. Measures should be put in place to
spur this and can include tax relief to large international/multinational
companies based on size of investment and number of actual employment created
as reflected on payroll. Other favorable measure to attract FDI should also be
considered.
§ -Proportions
for sector allocations are trending in the right direction with education,
health, security and infrastructural upgrades topping the list. These address critical social and
infrastructural upgrades that are necessary for a stable and prosperous
society.
§ -We are
particularly pleased with the social programmes contained to help struggling
families get their kids to school. However, government will have to find
appropriate mechanisms to ensure that the funds allocated reach its intended
targets and that the monies once received by the family, is spent for the
purpose intended. This could cause logistical and resource problems during
implementation and monitoring. To ensure efficacy, government would have to
spend and utilize additional resources, both financial and human. Additional
funds might have to be allocated for this.
§ -This
measure also raises the question as to whether the monies allocated could not
have been allocated to increase teachers’ salaries or increase the salaries of
the Guyana Police Force. It would be much easier to do so in terms of
implementation and the cost of doing so would have been cheaper.
§ -The
subsidies to GPL is welcomed since the high cost of fuel and electricity
generation would be too burdensome on consumers were it not for the
subsidy. In terms of the Linden
electricity subsidy, government should have taken the opportunity to tie that
subsidy and declare Linden as an Electricity Free Manufacturing Zone to
encourage manufacturers to set up operations and pursue the industrial
diversification of the economy. These electricity zones could offer free
electricity for a number of years and gradually include charges as companies’
financial and operational performances improve.
§ -The
Linden-Lethem road upgrade and the CJIA expansion programme are also welcomed
as they provide critical logistical and transportation efficiencies for our
private sector and in particular the mining and tourism industry. It is also hoped too that the road
upgrade would lead to increased cross border trade with Brazil.
§ -Need to
keep a watch on decrease in remittances that was US$141.1 million less last
year than in 2012. That means a significant sum of money not circulating in our
economy and this is money that is usually used as disposal income.
-GUYSUCO subsidy is necessary considering the state of the agency and the consequential social and economic consequences were it to stumble further. Annual Government subsidies to GUYSCO are an un-sustainable strategy and measures would have to be put in place to diversify the products manufactured by the entity. For instance, energy, confectionaries, molasses, animal feed, etc. Additionally, underperforming estates can be sold or offered at concessionary rental to multinational firms looking to invest and set-up their manufacturing and industrial operations. This would absorb any employment that is lost as a result of the estates’ closure
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