The following are budget measures announced yesterday by Finance Minister Dr Ashni Singh.
6.1 Mr. Speaker, it would be recalled that one of our first actions when we assumed office was to reverse a range of punitive and draconian taxes imposed by the previous Government during the period 2015 to 2020. In their place, we introduced a suite of measures designed to support economic growth and create greater opportunities for an improved quality of life. Budget 2025 builds on this momentum, continuing this Government’s commitment to boost economic activity, promote production and productivity, create ample opportunities for income generation, and incentivise effort and hard work. Against this background, I now wish to announce the following measures:
a. Easing the Cost of Living
i. Reduction in Electricity Costs
6.2 Mr. Speaker, I have previously indicated that Budget 2025 makes provision for the completion of the much-anticipated 300 MW combined cycle power plant. Our Government is committed to reducing the cost of electricity for every consumer in Guyana by 50 percent, once the GtE project is completed. This will not only lower household expenses but also significantly reduce operational costs of businesses, unlock the potential of the manufacturing sector, stimulate investment, and foster a more competitive and productive economy.
ii. Abolition of Bridge Tolls
6.3 Mr. Speaker, as part of our Government’s commitment to reducing the cost of living and improving connectivity for all Guyanese, I wish to reaffirm that, upon completion of the new Demerara River Bridge, slated for the second half of the year, bridge tolls will be abolished for all types of vehicles. This policy will apply not only to commuters at the Demerara River Bridge, but also to commuters utilising the Berbice River Bridge and the Wismar Bridge. The removal of these tolls will result in substantial savings to the benefit of over 50,000 daily commuters, amounting to an estimated $3.5 billion annually. This initiative reflects our Government’s dedication to making daily transportation more affordable, reducing travel time, while also facilitating greater economic activity and internal regional integration.
iii. Containing the Cost of Fuel
6.4 Mr. Speaker, since March 2022, this Government has maintained a zero percent excise tax on petroleum products at an estimated annual cost of $90 billion. While global fuel prices have marginally declined recently, prices still remain elevated compared to 2020 levels, and we are committed to continuing this measure to shield the Guyanese People from the full impact of high fuel costs.
iv. Reduction in Freight Charges
6.5 Mr. Speaker, in August 2021, this Government took action to address rising shipping costs by adjusting freight charges to pre-pandemic levels for the purpose of calculating import taxes. This measure was initially implemented for a six-month period and has since been extended, most recently through December 31, 2024, to alleviate the burden of high shipping costs on consumers at a cost of $22.8 billion over this period. As freight prices remain elevated globally, I wish to announce that this measure will be extended once again for a further 12-month period from January 1, 2025 to December 31, 2025, at an estimated annual cost of over $6 billion.
v. Continuation of Part-Time Job Programme
6.6 Mr. Speaker, the part-time job programme, introduced in 2022, has been instrumental in providing economic support to households across the country. It would be recalled that this program allows participants to earn $40,000 for 10 days work per month in public offices situated in close proximity to their homes. Since its inception, this initiative has injected over $600 million monthly in additional household income into these communities. Building on this success, this programme will continue into 2025 with a further allocation of $11 billion. This initiative not only provides immediate income but also encourages participants to develop relevant skills for potential transition into full-time employment.
vi. Other Cost of Living Measures
6.7 Mr. Speaker, since assuming office, this Government has made it a priority to engage meaningfully with communities and consult with stakeholders across Guyana. These engagements have informed interventions aimed at providing relief to some of our most vulnerable whilst supporting initiatives to mitigate price increases.
6.8 In 2022 and 2023, Government allocated $5 billion respectively to address cost of living concerns. This allocation was increased to $7 billion in 2024. Government is committing a further $9 billion for targeted interventions in 2025, based on stakeholder consultations, to ease cost of living pressures.
b. Supporting the Vulnerable
i. Increase in Old Age Pension
6.9 Mr. Speaker, it would be recalled that in 2015 the APNU/AFC government made a manifesto promise to double OAP immediately upon assuming office. If the APNU/AFC had kept their word, that would have resulted in OAP doubling from $13,125 in 2014 to $26,250 in 2015. Instead, OAP merely increased to $17,000 in 2015. Further, even after five years in office, the APNU/AFC government denied pensioners what was promised to them and by the end of their term in office in 2020, OAP stood at $20,500.
6.10 In contrast, this PPP/C government keeps its promises, and in this regard, with effect from January 1, 2025, OAP will be increased from $36,000 to $41,000 per month, in line with this Government’s manifesto promise. This represents a doubling of OAP since resuming office in 2020 and will benefit over 76,000 pensioners placing an additional $4.5 billion of disposable income in their hands. As a result, the total pension payout in 2025 will amount to over $37 billion.
ii. Increase in Public Assistance
6.11 Mr. Speaker, let it not be forgotten that the APNU/AFC government also promised to immediately double public assistance benefits upon assuming office. However, this promise, like their commitment regarding OAP, went unfulfilled during their five years in office, with public assistance increasing only marginally from $5,900 in 2014 to $9,000 in 2019. Under this PPP/C government, public assistance increased from $9,000 in 2020 to $19,000 at the end of 2023, more than doubling what was inherited.
6.12 I now wish to announce another increase in public assistance payments, effective January 1, 2025, from $19,000 to $22,000. This will place an additional $1.4 billion in the hands of 40,000 persons. As a result, the total public assistance payout in 2025 will amount to over $10 billion.
iii. Universal Health Voucher
6.13 Mr. Speaker, in addition to this Government’s numerous new and ongoing initiatives aimed at providing the best possible care for our citizens, and in alignment with this agenda, a $10,000 universal healthcare voucher will be available to each person to help finance a basic menu of health tests. This intervention is likely to cost the government an estimated $5 billion dollars and potentially reach 500,000 persons.
iv. Support for Newborn Babies
6.14 Mr. Speaker, in order to support the development and wellbeing of one of our most precious and valuable population group, newborn babies who will constitute the future of the Guyana, Government will provide a one-off grant of $100,000 for every newborn baby born in Guyana to a Guyanese mother, estimated at an annually cost of $1.3 billion annually.
c. National Insurance Scheme
i. One-Off Injection
6.15 Mr. Speaker, since its inception, the NIS has been Guyana’s foremost national institution in providing social security benefits for some of our most vulnerable. The optimal functioning of this agency is therefore paramount in ensuring that all those who rely on the NIS, whether it be for medical insurance or other services such as old age benefits or survivor’s benefits, have their claims processed swiftly and efficiently. In order to provide support for a better quality of living for a number of persons who have attained the age of 60 and have not met the 750 minimum contributions and are not entitled to receive old age pensions, Government will be injecting $10 billion into the Scheme, which will offer eligible persons with contributions ranging from 500 to 749 contributions, a full and final grant depending on the year the last contribution was made.
d. Improving Business Competitiveness
i. Depreciation of Capital for Poultry Farmers
6.16 In line with our Government’s vision to not only meet the rising local demand for poultry but also to become a regional supplier, poultry farmers will now be able to depreciate capital assets, such as machinery and equipment used in the production process, over a shorter period with an increase in the writing down allowance applicable to these machinery and equipment. By allowing poultry farmers to recover the costs of these investments more quickly, this initiative will reduce the financial burden associated with modernising production facilities, further incentivising investment, growth, and innovation while also boosting Guyana’s food security.
ii. Removal of VAT on Agriculture Machinery
6.17 Mr. Speaker, in an effort to further support expansion of the agriculture sector, we are proposing to remove import VAT on the importation of machinery used in the agriculture sector, where VAT has not already been removed, thereby reducing cost of inputs. This is expected to cost the Government in excess of $1 billion annually. In addition, to further support the agriculture sector, VAT will be removed on automated poultry pens and veterinary supplies.
iii. Removal of VAT on Back-Up Generators
6.17 Mr. Speaker, as Government acknowledges the short-term challenges of the provision of reliable and stable power, we will remove VAT on electricity generators, which will cost the Government over $200 million annually.
e. Increasing Disposable Income
i. Because We Care Student Grant
6.18 It would be recalled that since returning to office, this administration has restored and incrementally increased the BWC Student Grant initially from $10,000 in 2014 to $15,000 in 2021, then $25,000 in 2022, $35,000 in 2023 and most recently, $40,000 in 2024. In keeping with our Manifesto promise, I now wish to announce a further increase of the BWC Student Grant to $50,000, benefiting over 205,000 children across public and private schools, placing an additional $2 billion into the hands of parents.
6.19 Together with the BWC Student Grant, the uniform voucher allowance of $5,000 will result in parents of over 205,000 school children receiving a total of $55,000 per child, resulting in an estimated $11 billion being transferred to parents and their children.
ii. Free University and Technical and Vocational Education
6.20 Mr. Speaker, it would be recalled that our path to offering free tertiary education began in 2023 with a write-off of outstanding student loans at the UG which, as of the time of budget presentation, has benefitted over 2,700 persons at a cost of $1.8 billion. This write-off was just the first phase of our Government’s strategy to make tertiary education accessible to all.
6.21 In keeping with our Government’s Manifesto promise to deliver free tertiary education within our first term, it is my pleasure to reaffirm that, for the first time in over three decades, citizens of Guyana will have universal access to free, high quality education at the University of Guyana. Beginning in January 2025, no current or future student enrolled at the University of Guyana will be required to pay tuition fees. This initiative is estimated to benefit approximately 11,000 current students as well as all future scholars, at an estimated annual cost of $13 billion per year.
6.22 In addition to the removal of tuition fees at the UG, this Government is similarly abolishing tuition fees across every government technical and vocational training institution. Effective January 2025, every current and prospective student at these institutions will benefit from a tuition-free education serving in excess of 3,000 students.
iii. National Cash Grant
6.23 Mr. Speaker, this government has implemented a suite of measures to increase the disposable income of everyday hardworking Guyanese since assuming office in 2020. These include the $25,000 per household COVID-19 relief cash grant in 2020. To further increase the disposable income of families, the $100,000 cash grant for every citizen in Guyana aged 18 and older will be further rolled out this year with an additional $30 billion budgeted targeting the Coastal Regions. On completion of the programme, a total to $60 billion will be placed directly into the pockets of our adult citizens.
iv. Adjustment to Taxes for Children
6.24 Mr. Speaker, to further increase the disposable income of parents, this Government will introduce a provision whereby, for each child, one parent would be allowed to claim $10,000 monthly of their income as non-taxable, The estimated annual cost is over $1 billion.
iv. Adjustments to Taxes paid on Overtime
6.25 Mr. Speaker, for those persons who earn overtime for work beyond their normal working hours, the first $50,000 monthly of their overtime would be non-taxable. This measure is designed to ensure workers are rewarded for their productivity and effort. The estimated annual cost of this intervention is over $600 million.
v. Adjustments to Taxes paid on Second Job
6.26 Mr. Speaker, for those who have a second job in addition to their full-time primary job, the first $50,000 of income earned monthly from their second job would be non-taxable. This measure will incentivise and reward persons for hard work and increase disposable income by over $500 million.
vi. Income Tax Threshold
6.27 Mr. Speaker, in 2022, the income tax threshold was increased from $65,000 to $75,000 monthly then to $85,000 in 2023 and most recently to $100,000 in 2024. I now wish to announce an increase of the threshold to $130,000 monthly, with effect from year of income 2025. This represents a doubling of the threshold from the time we entered office. This will result in an additional $8.5 billion in disposable income for workers and the removal of 22,000 persons from the tax net.
iii. Adjustments to Taxes on Personal Income
6.28 Mr. Speaker, finally in the interest of increasing disposable income in the hands of workers, I wish to announce a reduction in the Personal Income Tax rate of 28 percent to 25 percent for employed and self-employed workers. This measure will increase the disposable income of more than 100,000 of taxpayers and is estimated to put $3.6 billion back into the hands of these taxpayers.
6.29 Mr. Speaker, it is estimated that these measures will aggregate to over $90 billion, not including the impact of the electricity tariff adjustment and the removal of the excise tax on fuel, being placed in the hands of individuals and businesses to promote the growth and expansion of economic activity and job creation.
