Ahead of tomorrow’s emergency budget presentation, President Irfaan Ali yesterday announced a slew of relief measures, including a $25,000 per household cash transfer to cushion the effects of COVID-19.
“We are hoping that this can help in some way to support families, many of whom do not have enough food to put on the table at this moment. So this $25,000 per household, I know, will go a far way in supporting those who are vulnerable and in critical need. That is why we are pursuing this direct cash transfer to every household,” Ali said when announcing the initiative yesterday during a press conference at the Arthur Chung Conference Centre.
While the president did not indicate whether the sum will be a one-off transfer, Vice President Bharrat Jagdeo later informed that the money will be distributed to each household. He said an extensive form has been developed that has the name of the recipient, their identification information and the monies will be given in the form of vouchers with security features that will make them hard to duplicate. He said where there might be more than one family living in one home, representation will have to be made outside of the normal distribution. It is not clear when the distribution will begin.
Also among the measures announced yesterday were the removal of corporate tax on private education and health care, the removal of VAT on medical supplies and the increase of the old age pension by some $5,000 to $25,000. Additionally, an education grant, pegged at $15,000 per student, will also be reintroduced, while the annual school uniform voucher will be increased from $2,000 to $4,000, while to assist with e-learning, which has been expanded due to the COVID-19 pandemic, the president said that $200 million has been set aside to expand the Guyana Learning Channel. The government will also set aside some $5 billion for the struggling sugar industry. Ali also announced a two-week tax-free bonus for members of the Joint Services and that $150 million will be set aside to give assistance to nurses and doctors and other frontline workers who have been making great sacrifices during the COVID-19 pandemic. It is unclear how exactly the workers will benefit.
The measures will be included in the emergency budget expected to be presented to the National Assembly on Wednesday by Minister of Public Works Juan Edghill.
Speaking at the press conference, Ali shared a number of measures and policies that his administration plans to pursue immediately to bring relief, stimulate economic activity and put back people to work.
He announced the reversal of VAT on electricity and water, which he believes will bring “tremendous benefit” to all aspect of the country’s economy and help the manufacturing sector and every household.
VAT and duties will also be reduced from machinery and equipment to allow for the recapitalisation of key sectors, inclusive of mining, forestry and agriculture. Tax concessions will also be granted for ATVs for mining, forestry, agriculture and manufacturing. “So this is another major initiative and commitment in terms of our manifesto that will bring immediate relief…,” Ali said, while noting that all of the mentioned sectors have been underperforming and are faced with tremendous difficulties. He said it is estimated that 65% of the productivity of the mining sector has been lost and it is envisioned that the announced relief will help to recapitalise the sector and bring back the medium and small-scale miners into productive capacity and help to create jobs and wealth.
Miners will no longer have to source road licences for mining equipment and police clearance to transport fuel in their own vehicles. The two requirements, according to miners, were impediments to their work and created tremendous bureaucracy.
In order to stimulate the logging industry and help the forestry sector, Ali said they will now allow sawmillers to export logs, which he believes will increase production and tax revenue, while giving tremendous help to small loggers and the saw millers.
Campaign promises
The administration will also be reversing the increases in land lease fees that were introduced by the last administration. These will be reverted to the rates that were in place in 2014 and it is believed that all the productive sectors will benefit. The charges for drainage and irrigation are also going to be reversed to the rates they were at the end of 2014
VAT will also be removed from fertilisers, chemicals, pesticides and key inputs in the poultry sectors. The poultry sector will also be reverted to a zero-rated VAT status.
There will be no more VAT on hinterland travel, which the president said has been raised continuously by hinterland travellers and the tourism sector as the tax brought tremendous burdens.
The president also said his administration will be keeping one of its campaign promises by reversing the policy that banned the importation of used tyres and the policy that disallowed the importation of vehicles more than eight years old. The president believes that the latter will make vehicle ownership for the poor, vulnerable and those who use cars for taxi services more accessible and more affordable. “We are a developing country so our policy and programmes must be in keeping with our developing path,” he added.
And to ensure that more young people can own their own home, Ali announced that they have increased the sum that will attract mortgage income tax interest relief to $30 million.
“This will help new home owners. This will help young people where your loans for housing, up to $30 million, the interest from those loans will become income tax deductible…” he said.
There will be an increase for low income homes to qualify for tax relief in the banking sector. All licence fees that were increased during the last administration will be reduced by half in the future.
Building and construction material and cellular phones will no longer attract VAT.
Meanwhile, the president announced that there will be an introduction of the Community Support Officers programme through the setting aside of $800 million for the Amerindian Development Fund to help hinterland communities. Solar systems, valued at $25,000 each, will also be given to the hinterland communities. The president said that $1.5 billion will be set aside for hinterland and urban roads. And to ensure that food production in Region One is increased and to support farmers, the communities and trade, efforts would be made to acquire a new ferry for the North West which will be able to provide cold storage facility.
Special incentives will be granted for accessing land for the planting of corn and soya beans for local and regional feed mill demands, while tax concessions are going to be granted in the agro-processing sector.
And in an effort to support the sporting community and support the development of young people, Ali said three multipurpose sport complexes will be built in regions Two, Six and Ten.
“These are some of the investment measures and policies that we will pursue in this emergency budget and in January to bring relief, to create opportunities and to improve the welfare and wellbeing of all the people of our country,” Ali said.
