PSC happy with 2013 Budget – will build on public-private partnership, encourage young professionals

The performance of the Guyanese economy continues to vindicate government’s efforts over the years to diversify the country’s productive base, and reduce exposure to external and other shocks, Finance Minister Dr Ashni Singh said on Monday as he presented the 2013 National Budget.

Several specific measures were highlighte in the budget including the following:

• The current tax free threshold for property tax on companies is $1.5 million. From 2014, 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.
• 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.
• With effect from year of income 2013, first time home owners, 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
• The PAYE rate is now 30 percent instead of 33⅓ percent. As a result of this reduction, more than 184,000 taxpayers will benefit with higher take home pay, and an additional $1.8 billion of disposable income will be available to taxpaying citizens

Chairman of the Private Sector Commission (PSC) Ronald Webster

Chairman of the Private Sector Commission (PSC) Ronald Webster said these are some key measures that offer an incentive for young professionals to remain in Guyana.

Speaking on the National Communications Network’s “Budget at a Glance”, Webster said that by providing these incentives such as tax breaks on mortgage payments,  young professionals are encouraged to remain in their country, and also their employers to invest more in staff development.

Webster highlighted the growing trend of public/ private partnerships, noting that, “The public side of it has far greater reach whereas the private sector part of it has strength in marketing, hands on management and expertise. You combine those two and you get some pretty fantastic results”. He listed some examples such as Ogle Airport expansion project, the Berbice River Bridge and proposed new Demerara Harbour Bridge.  These partnerships, as he described them, have and will have in the future, positive impacts for the economy and society.

He described the private sector measures as a stimulus package which will go a far way to boost the nation’s economy.

Chairman of the PSC’s Sub- Committee on Governance and Security, Gerry Gouveia

Chairman of the PSC’s Sub- Committee on Governance and Security, Gerry Gouveia expressing his opinion, said this year’s budget was pleasing to the private sector. “We had been talking about the reduction of PAYE for a long time, we have been talking about tax reform”. He stated that high taxation has always been a deterrent to development so the revisions to the corporate taxes and other measures were welcomed.

Gouveia said that  he was pleased that the budget addressed the issue of security, noting that, “a lot of money will be pumped into the sector” as “Internal security remains a serious challenge”.

He also welcomed the 25% increase in old age pension and said the need to incrementally increase the NIS contribution was understandable to ensure its viability.

Chairman of the Private Sector Commission Sub- Committee on Trade and Investment Ramesh Dookhoo

The 2013 budget was also described as a “water shed one” that recognises the growing professional middle class, according to Chairman of the Private Sector Commission Sub- Committee on Trade and Investment Ramesh Dookhoo.

“We have been advocating for years with the finance minister that we need to recognise this emerging middle class, and reward them and we are very happy that this has been done”.

He noted that with less financial pressure  on the middle class, even employers can be more flexible and competitive.

The move to increase social spending was also lauded. The increased economic growth, particularly over the past seven years in the midst of a world economic downturn, was described as a huge success for Guyana, especially since many other nations have not been as fortunate.

Dookhoo opined that issues of parliamentary uncertainty could be a deterrent to potential investments, and that the public in particular would like to see more constructive engagements to move the country forward.