During a three-hour presentation to the National Assembly, Finance Minister Dr. Ashni Singh yesterday unveiled a $142.8B budget, which is expected to be significantly funded by collections from the Guyana Revenue Authority (GRA).
The budget, titled “Consolidate, transform, sustain,” represents a 10.8 % increase over last year’s announced expenditure. Like last year, Singh did not announce an increase in the income tax threshold but noted that there would be no new taxes.
Addressing the Assembly, Singh said that the “current revenue (not including receipts from the Guyana REDD+ Investment Fund (GRIF) is budgeted to increase by 3.5% to $98.2B, of which the GRA is projected to collect $94.1B.”According to him, “Custom trade taxes are projected to collect $8.3 billion, representing an 8.1% increase primarily attributed to higher import duties, on account of both higher levels of imports along with improved surveillance activities by GRA.” He said too that “internal revenue collections are targeted to increase by 5.1% to $38.6B, reflecting improved private sector performance in the areas of corporation taxes and income from the self employed.”
“Value-added and excise taxes are targeted to increase by 5.6% to $47.2B, due to higher VAT collections on both imports and domestic supplies consistent with projected increases in business activities,” Singh announced. He added that non-tax revenue is projected at $4.1B or 29.2% below the 2009 collections, mainly on account of lower Bank of Guyana net income transfers and dividends from equity holdings.
Last year, the GRA contributed $89.1B, which represented 93.9% of the country’s total current revenue. Internal revenue collections increased by 6.3% to $36.7B.
Meanwhile, the Minister announced that the country’s National Accounts have been rebased to 2006 prices from January of this year. Additionally, the basket of goods and services underlying computation of the Consumer Price Index (CPI) has also been updated from January of this year. The rebasing of the National Accounts would be for greater accuracy in calculating the country’s GDP, while the updated CPI would lead to a more accurate determination of the country’s inflation rate.
According to the Finance Minister, the overall real growth in Gross Domestic Product (GDP) is projected to be 4.4%. Last year, the country recorded a Growth Rate of Real GDP of 2.3%. In the 2009 Budget, this figure had been pegged at 4.7%. The non-sugar economy is projected to grow by 3.4%. Last year, the non-sugar gross domestic product grew by 2.2%.
In relation to inflation, Singh projected a rate of 4%. In 2009, Guyana recorded an inflation rate of 3.6%. The Finance Minister said that “this occurred against the background of the depressed global conditions…which resulted in price pressures imported into the domestic economy being minimal.”
Meanwhile, Singh announced that the sugar production for this year is anticipated to 280,000 tonnes, 19.8% above the 233,736 tonnes recorded last year. In the 2009 Budget, Singh had projected a production rate of 290,000 tonnes for the year and had identified this as key to the economic stability of the country for the year.
Although recording production of 359,789 for the rice sector during last year, Singh said that during 2010, the rice industry is projected to contract by 4.6 percent to 343,373 tonnes. The bauxite industry, Singh said, is expected to recover with a 9.1% growth to 1,620,000 tonnes, as the operations of both bauxite companies are expected to be scaled up in response to some expected renewal in demand on the world market for aluminum. Last year, this sector performed poorly, contracting by 29% from the previous years and recorded a production level of 1,484,935 tonnes.
Gold declarations, the Finance Minister said, “are expected to grow by 4% to 311, 816 ounces.” He noted that this was less than the industry’s own projection of 500,000 ounces. Diamond production is expected to grow by 4.2%.