Dear Editor,
The African Business Roundtable (ABR) supports the idea of having the income tax structure of the country adjusted in a phased approach over the next five years. The tax structure consists of the various taxes that are used to collect revenue on behalf of the government. The taxes include the income tax levied on individuals and businesses, estate and inheritance taxes, property taxes, production and consumption taxes, the trade and travel taxes and the various miscellaneous taxes. The ABR specifically recommends that the personal income tax be phased out for Guyanese workers while the tax rate for businesses, especially agricultural and manufacturing businesses, be reduced significantly, if not eliminated altogether.
The ABR believes that it is the correct thing to do and the time is right to do so given the anticipated surge in government revenues from the oil and gas industry and the favourable capital formation achieved by the country within the last few years. Assessments and the most recent announcements continually show that the oil and gas industry will dominate the economy by the end of the upcoming “five-year” budget cycle. On Wednesday July 24, Dr. David Pollard, in a lecture on the “Impact of Oil Revenues on Guyana,” affirmed this viewpoint. The surge by the oil and gas industry could have a catastrophic impact on the much needed agricultural and manufacturing sectors as investments and resources shift away from them to take advantage of the burgeoning revenues of the nascent oil and gas industry. Incentives specifically designed to allow for higher and faster profitability in the agricultural and manufacturing industries would help to nullify the possible disastrous impact that the oil and gas industry could wreak on those two sectors.
Based on recent World Bank data, the period 2016 to 2018 has seen a higher increase in the productive capacity of the country than during the period 1998 and 2015, setting the stage for even higher and faster economic growth. The ABR also believes that now is the time for government to make the necessary changes in the tax structure since delaying action would only make it difficult for Guyana to enhance its food security and remain a net exporter of food in this oil-driven climate. The removal of the personal income tax and the lowering of the tax rate significantly for businesses would also facilitate the continual growth in private capital formation that can support additionally a transition to a green economy. The special incentive to workers and the agricultural and manufacturing sectors could also attract more persons to the labour force and the entrepreneurial class, thereby increasing further the prospects for economic sustainability, lower unemployment and an enjoyable lifestyle.
Yours faithfully,
Leon Roberts
Business Development and Liaison
Officer
African Business Roundtable
