Government has published regulations in the Official Gazette to waive taxes on the retroactive wage increases for public servants.
The Income Tax (Special Provision) Regulations were signed by Minister of Finance Winston Jordan on November 13th and published yesterday as part of an extraordinary gazette.
“The shall be exempt from tax the retroactive percentage increase in salary for the period beginning January 1, 2019 and ending December 31, 2019 for public servants and public officers in the employ of the Government of the Co-operative Republic of Guyana,” the order states.
The regulations were dated one day before President David Granger announced to the nation that public servants, including teachers, nurses and doctors, and members of the defence, police and security services, will receive permanent, tax-free increases in wages – 8.5% to 9% – and hefty allowances this year, all of which will be retroactive to January 1st, 2019.
Further, persons previously earning the old minimum wage will receive a bonus of $69,336. All increases and bonuses are expected to be paid out next month. The minimum wage will rise from $64,200 to $70,000.
Those public servants earning over a million dollars a month will not see an increased salary.
During his address, the President said that public servants’ minimum wage will increase by 9% from the current $64,220 to $70,000. Sweepers/cleaners will also be receiving the new minimum wage.
Meanwhile, public servants earning between $100,000 and under $1 million will receive an 8.5% increase, while those earning below $100,000 will receive a 9% increase in their salaries.
Finally, public servants earning $64,220 and below will receive an additional $69,336 in their December pay cheque. “Public servants earning a minimum of $69,336 will receive, in their December pay cheque $69,336, a sum in excess of their base salaries”, the President said in his address to the nation.
It is important to note that public servants who received the old minimum wage of $64,220 will benefit from both the 9% increase in the minimum wage, and the additional $69,336 in excess of their base salaries.
In the case of allowances, station allowances for public servants receiving same will be increased by over 260 percent from $2,800 to $10,000, while hinterland allowances will be increased by between 100% and 600%, from between $4000 and $12,000 to $24,000, depending on the class of public servant.
Further, risk allowances will be increased by 900% from $500 to $5,000, while the uniform allowance for health sector workers will be increased from $13,000 and $22,135 to $15,000 and $30,000, respectively.
Finally, the President also said that on-call allowances for doctors will also be increased, although he did not say by how much.
