LET US LOOK AT THIS YEAR'S BUDGET AND HOW IT IMPACTS YOU!!
Some of the measures announced in this year's Budget and how it will impact upon you are:
1. In 2013, Government will invest $12.6 billion to further improve our roads and bridges network, of which $11.2 billion will be spent on roads and $1.4 billion on bridges. Of this amount, $4 billion has been made available for the completion of the four lane access road to CJIA, the continuation of the East Bank Demerara four lane highway, the completion of the designs and commencement of works on the Sheriff Street to Mandela Avenue Roadway, the upgrade of the 30.5 kilometre West Coast Demerara Road from Vreed-en-Hoop to Hydronie, and the continuation of the widening of the highway from Better Hope to Golden Grove. Further, Government will complete the designs and commence construction of 14 kilometres of farm to market roads at Parika and Ruby backdams, thus opening up access to over 330 farming households and over 2,000 acres of mixed crop farming.
- The works to be undertaken will provide thousands of jobs across the country.
- The improved roadways will reduce the cost of transportation, increase the speed at which goods and services can be accessed and will reduce prices for food items as it will be cheaper to transport goods to be sold on the market.
2. Sums totalling $16.4 billion are allocated for the installation of the new Wartsila engines at Vreed-en-Hoop, construction and upgrading of 7 substations, installation of transmission lines from Sophia to Onverwagt along with a supervisory control and data acquisition system (SCADA), and completion of the ongoing frequency conversion programme, among other works.
- The provision of a reliable and affordable electricity supply is necessary in the area of production
3. $28.7 billion has been budgeted for the education sector in 2013
- Education gives people the skills they need to help themselves out of poverty and into prosperity
- With each additional year of schooling, people earn 10% higher wages. These earnings, in turn, contribute to national economic growth.
4. In support of the company’s plans to modernise the industry, Budget 2013 provides an amount of $1 billion to be transferred by Government to GUYSUCO to help the company meet the financing requirements of its transformation plans.
- This support by Government to the sugar industry will redound to the benefit of the industry’s 18,000 workers, their families, and suppliers of goods and services to the company. Together, more than 120,000 persons will benefit directly or indirectly
5. Capital transfers to GPL totalling $5.8 billion to support that company in meeting its cash flow requirements.
- GPL last raised electricity tariffs since 2007, when fuel prices were a fraction of what they are today. The escalation in fuel costs have been borne by GPL in the absence of tariff increases, placing tremendous pressure on the cash flows of the company. For this reason, it was necessary last year for Government to inject a transfer of $6 billion into GPL. Those circumstances remain substantially unchanged. Otherwise you the consumer would've bad to be burdened with the cost.
6. Budget 2013 allocates sums totalling $2.9 billion to meet the cost of maintaining the electricity subsidy in Linden and Kwakwani so that 10,363 electricity customers in Region 10 can continue to benefit from the currently prevailing rates through the remainder of the year
- It would be recalled that efforts were initiated in last year’s budget to gradually align the electricity rates paid by the residents of Linden with those paid by electricity customers on the GPL grid. The unfortunate events following those proposals are now well known, leading to the agreement that a committee be established to examine the matter of electricity rates in Linden. Pending the completion of the work of that committee this allocation was necessary
7. Budget 2013 provides for the old age pension to be increased to $12,500 per month, an increase of 25 percent, with effect from May 1, 2013.
- The annual impact of this increase would result in an additional $1.3 billion of disposable income being placed in the hands of 42,500 senior citizens.
8. With effect from 2013, Government will make a contribution to help each old age pensioner who is a customer of GPL meet the electricity charges they incur with that company. In this regard, Government will provide each old age pensioner with assistance of up to $20,000 per annum to pay GPL for electricity charges incurred.
- This assistance will reduce the electricity charges that will have to be met by each pensioner who is a GPL customer, and will have the effect of increasing the disposable income of our senior citizen population by a further $590 million per annum
9. With effect from June 1, 2013, the contribution rate for both employed and self-employed contributors will be increased by 1 percentage point. In order to ensure that the vulnerable feel no impact as a result of this increase, I wish to announce further that Government will meet both the employer’s and the employee’s share of the increase in contribution payable with respect to employed persons whose income is not more than $50,000 per month.
- This initiative will cost the Government approximately $215 million per annum and will benefit some 58,300 contributors
10. With effect from year of assessment 2014, companies will be charged at the following rates. The first $10 million of net property will be taxed at zero percent, the next $15 million of net property will be taxed at 0.5 percent, and the remainder of net property will be taxed at 0.75 percent.
- In other words, whereas the current tax free threshold for property tax on companies is $1.5 million, the new threshold will be $10 million, as a result of which thousands of small businesses with net property below $10 million will no longer be subject to property tax. This will give such businesses more capital to re-invest and expand creating more jobs in the process
11. With effect from year of assessment 2014, individuals will be charged at the following rates. The first $40 million of net property will be taxed at zero percent, and the remainder of net property will be taxed at 0.75 percent.
- In other words, whereas the current tax free threshold for property tax on individuals is $7.5 million, the new threshold will be $40 million, as a result of which tens of thousands of low and middle income earners with net property below $40 million will no longer be subject to property tax.
12. With effect from year of income 2013, first time home owners who are holders of mortgage loans of up to $30 million granted to them by commercial banks or the building society will be permitted to deduct the interest they pay on such mortgages from their taxable income for the purposes of personal income tax.
- In other words, that portion of taxable income used by a first time home owner to pay interest on a housing loan of up to $30 million from a commercial bank or building society will be exempt from personal income tax. This initiative will cost Government approximately $580 million and will benefit tens of thousands of first time home owners, low and middle income alike.
13. With effect from year of income 2013, personal income tax will be charged on income above the current threshold of $50,000 per month or $600,000 per annum at a rate of 30 percent instead of 33⅓ percent.
- As a result of this reduction in the personal income tax rate, more than 184,000 taxpayers will benefit with higher take home pay, and an additional $1.8 billion of disposable income will be placed annually in the hands of the taxpaying public.
