Budget 2016

By Edward Layne

The Private Sector Commission (PSC) has called on Government to rescind its plans to ban the importation of used vehicles that are more than eight years old.

Finance Minister Winston Jordan

Finance Minister Winston Jordan, during his presentation of the 2016 National Budget, announced that the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, effective May 1, 2016, will ban the importation of used or reconditioned vehicles that are eight years old and older from the date of manufacture to the date of importation.
The measure will also see a removal of the excise tax on 1500cc motor vehicles under four years old and a reduction of the excise tax from 50 per cent to 10 per cent on motor vehicles under four years old, between 1500cc and 2000cc.
However, the PSC called for a review of the ban, which it said will only bring undue hardship to poor Guyanese.
“The introduction of bans has a negative connotation and seems unnecessary at this time and should be seriously reviewed and reconsidered.  This is likely to place undue pressure on low- and middle-income persons,” the PSC said.
Already several used car dealers have taken the Government to task over what they termed as an act that will essentially kill the industry and put additional pressure on low-income Guyanese.
Leader of the Opposition, Bharrat Jagdeo, during a news conference shortly after the Budget presentation, said the ban would completely deny the poorer class of Guyanese from enjoying the luxury of owning a vehicle.
“Vehicles beyond eight years now will be banned. So a lot of vehicles that are coming into this country, they older and cost a bit more in foreign currency for the country because they are not as efficient etc; they are a bit more polluting, but at least a section of our population that is may be middle income, lower middle income, poor can still afford something to drive. Now, they are not going to be able to with the banning of vehicles that are eight years old,” Jagdeo said.

Compliance certificates
The PSC expressed concerns over the planned implementation of the requirement to provide compliance certificates in order to obtain licences and called for clarity on the impact of this measure.
“We feel that this measure, while being a good way to ensure compliance, should have been implemented at least a year after the date of its announcement to give persons time to get their taxes in order,” the PSC said.
It also questioned the Guyana Revenue Authority’s ability to respond to the possible rush of persons who could be seeking to regularise their tax status.
“The capability of the Guyana Revenue Authority is paramount to the smooth implementation of this measure and we do not believe that the agency is currently capable of handling the expected thousands of persons who will be seeking in a short time to regularize their status as taxpayers,” the statement said.

Tax reform
The PSC said it was disappointed that its recommendation for a comprehensive review of aspects of the tax regime did not find favour with the Administration, but welcomed other tax adjustments.
“We are disappointed that this has not found favour at this time, but we understand that such reform may have to await the findings of the Tax Reform Committee.  The increase in the tax threshold is welcomed though we feel that this should have been higher to provide relief to lo- income earners,” the PSC said.
The Commission also noted that it was pleased the Value Added Tax rate was not reduced, while expressing satisfaction with the exemption of packaging materials.
The PSC described the increases in gun licence fees as fair and said they would boost Government revenue, but it was concerned about the impact this measure would have on indigenous people who rely on shotguns for their livelihood.
“The Commission … is hopeful that public servants will soon receive their salary increases and that these will be substantial, since not only is this needed by the persons themselves, but the resultant spending will help the economy to recover.
The PSC said that the Budget would provide a significant stimulus to the economy as it recovers from a sluggish 2015.
It expressed satisfaction with the budgetary allocations in the areas of infrastructure development,  education, health, public security and agriculture,  as well as the fact that the Amaila Falls Hydroelectricity Project is being studied again and urged the Government to see this project through since it would have untold benefits to business and to all consumers of energy.
The PSC also expressed satisfaction with the plans for a new Demerara Harbour Bridge and the East Bank to East Coast bypass road.