In an unprecedented move, the private sector and the two trade union umbrella bodies have appealed to the government and parliamentary opposition for urgent dialogue on areas of concern in the proposed 2017 national budget.
The appeal was made yesterday by the Private Sector Commission (PSC), the Guyana Trades Union Congress (GTUC) and the Federation of Independent Trade Unions of Guyana (FITUG), which invoked Article 13 of the Constitution to seek “urgent engagement” on the budget ahead of next week’s consideration of the estimates. They are seeking dialogue before the passage of the budget, with the clear aim of having changes made to the areas of concern.
“We, the undersigned, stand ready to meet with you at mutual convenience within the next few days, notably before the National Assembly goes into committees to fine-tune the Budget,” PSC Chairman Edward Boyer, GTUC General Secretary Lincoln Lewis and FITUG President Kenneth Joseph wrote in a joint letter to House Speaker Dr Barton Scotland, Prime Minister Moses Nagamootoo, who is the Leader of Government Business in the House, and Opposition Leader Bharrat Jagdeo.
Jagdeo has since indicated that he would be willing to be part of such an engagement at the convenience of the other parties identified. “Whether it is tomorrow or Monday, I am willing to engage as requested before the debate on the estimates begin on Tuesday,” he told Stabroek News in an invited comment.
The Office of the Prime Minister, when contacted for comment, could not confirm whether Nagamootoo had received the correspondence. “The Prime Minister has been in Parliament all day and I am not certain if he has received the letter,” Press Secretary Imran Khan explained.
Article 13 of the Constitution provides for the involvement of civil society in decision making on areas that affect their wellbeing and the appeal by the groups will likely test the government’s commitment to the principle of inclusionary democracy.
In their letter, which was released to the media, the groups cited a range of provisions in the proposed budget that they have concerns over, including the new Value-Added Tax (VAT) and Pay As You Earn (PAYE) regimes, taxation on key services and the proposed garnishing of accounts of delinquent taxpayers by the Guyana Revenue Authority (GRA).
In addition to announcing the planned reduction of VAT from a rate of 16% to 14%, Finance Minister Winston Jordan also unveiled plans for the tax to be made applicable to monthly electricity and water consumption bills exceeding $10,000 and $1,500, respectively. The move to tax electricity and water has attracted widespread criticism.
Although they acknowledged that the APNU+AFC in its 2015 elections manifesto had committed to lowering the VAT, which they applauded, the three groups said they are concerned over the potential negative impact, both direct and indirect, on consumers, workers and citizens.
They also pointed to proposed new taxes on the utilities, including internet, as well as healthcare and education and noted that these are areas vital to the development and wellbeing of the country. “Though it is not being disputed the need to source funding for these, the concern is that the methodology being applied in achieving same may have adverse effects,” they added.
They also voiced concern over the removal of subsidies from the pension population, which was initiated in the administration’s inaugural budget last year. “It is positively recognised that government has within its 18-month stewardship increased pension by 45%. With the removal of subsidised water and electricity from this vulnerable group, it is of concern their quality of life will face more challenges with new taxes added to other essential items and services,” they pointed out.
The letter urged a “stay” on the planned amendment of the Income Tax Act to facilitate garnishment by the GRA, saying there should be further consultation and deliberation. The strong view held is this is unnecessary based on existing powers and rights of collection, they said, while adding that it is important to have the contention resolved.
Lastly, in light of environmental compliance required by local manufacturers, the groups said tax measures, such as the environmental tax, should be “carefully considered” before implementation. They further argued that the tax measures on the mining industry would reverse benefits from several concessions and should be removed since additional taxes ”would be a burden and disincentive” to participating in and upholding the standards of the sector.
“It is our collective view that should we objectively engage on the aforementioned issues, such would bode well for making the Budget an inclusionary document that the society can work with in achieving the objective of “Building a Diversified, Green Economy: Delivering the Good Life for All Guyanese,” they added.
