Vice President Bharrat Jagdeo yesterday announced government’s intervention to remove several taxes from the mining sector to the value of $1.9b to cushion the rising cost of operations.
While meeting with miners from the Guyana Gold & Diamond Miners Association and other stakeholders in the mining industry, Jagdeo disclosed that government will reduce the final tax applied to miners’ income, withdraw the current 10% Tributors tax, and the 14% VAT charged on lubricants.
“This is a combined package of maybe $1.9 billion that the industry will see returned to it,” he noted as his announcement was welcomed with loud applause from those present in the audience at the Arthur Chung Conference Centre.
According to the Vice President, the final tax will be reduced by 1% and will see over $1.4 billion returned to the industry. The final tax has been set at 3.5% but for now will be at 2.5%.
“We had made some promises in the manifesto and accomplished most of these with the exception of one. Now given that if you look at what we are trying to achieve all of these in the second year in government. I spoke with the president and he has agreed that we will now reduce the final tax”, Jagdeo said.
The Vice President stated that the removal of VAT on lubricants is not only for the mining sector to benefit, but all industries.
Jagdeo noted this is the most they can do to assist industrial operations to cushion the rising fuel cost since government has already removed the 50% excise tax.
He went on to state that while they did not promise the removal of the Tributors Tax, a unique form of income tax that is only applicable to the mining industry in Guyana and basically acts as PAYE for the sector, they saw it necessary to do so considering the hardships small miners have been faced with.
This measure will see the loss of some $300 million to the government, but it is a much needed measure to ensure sustainability of the sector. And in response to numerous complaints of deplorable access roads in the mining sector, the government will be putting $4 billion towards road upgrades
It was noted that these measures are geared towards the fulfillment of the government’s campaign manifesto.
