Finance Minister unveils record breaking $192.8B budget

–  income tax threshold increased to $50,000 per month
– old age pension and public assistance raised to $8,100 and $5,900 respectively
– economy to grow by 4.1%

FINANCE Minister Dr. Ashni Kumar Singh yesterday unveiled a record breaking $192.8 billion National Budget in the National Assembly. Last year’s budget of $161.4 billion, which was the largest budget, has again been surpassed.
Among the proposed measures announced by Dr. Singh in his almost three-hour presentation, which was punctuated by regular applause from his colleagues, is an increase of the personal income tax threshold to $50,000 per month from its previous level of $40,000. This will result in more disposable money for workers and 21,000 persons being removed from the income tax net.
The minister also disclosed that the government intends to provide financial support to the sugar industry and the Guyana Power and Light (GPL) to the tune of $4 billion and $6 billion respectively.
He explained that in the case of the sugar industry the support is proposed because of the challenges confronting the Guyana Sugar Corporation (GUYSUCO).
“Our government’s position has always been clear and steadfast. We will spare no effort to ensure that the industry is transformed into a viable and competitive one,” the minister stressed.

“The prevailing dispensation will test and hopefully prove our resolve as a people, and within this House our respective will to serve as responsible representatives of a deserving people to work together in service to the cause of national development.” – Dr. Ashni Singh

With respect to GPL, he explained that the proposed financial support is to ensure that tariff rates are not increased as the power company grapples escalating fuel prices.
“Recognising the importance of cushioning as far as possible the impact of imported oil price movements on domestic consumers, Budget 2012 includes a transfer of $6 billion from central government to GPL,” Dr Singh explained.
In accordance with the Low Carbon Development Strategy (LCDS), the budget is also proposing legislation to remove applicable taxes on equipment used for generating electricity from renewable sources for both household and commercial purposes.
With respect to export duties, the Finance Minister said Article 14 of the EU/CARIFORUM Economic Partnership Agreement provides that customs duties should not be applied to originating exports. As such, the budget is proposing legislation to give effect to this understanding.

ECONOMIC PROJECTIONS FOR 2012
The economy is expected to grow by 4.1% for this year, continuing on the path of positive growth which it enjoyed for the past five years averaging 4.4%, the minister revealed.
In this regard, all the major agriculture sub-sectors and service sector are projected to show an increase with the sugar industry pegged at 5.7%; rice-2.6%; livestock-4.9%; manufacturing 3.9%; wholesale and retail service -6.3 and 6.5 respectively and transportation -9%; mining – 1.8%. However, forestry and fishing is expected to decrease slightly.
Inflation is predicted to be 4.6%.

ECONOMIC REVIEW FOR 2011
According to the Finance Minister, last year the economy experienced a real growth of 5.4%, with the non-sugar Gross Domestic Product (GDP) achieving a higher growth rate of 5.6%. This achievement, he explained, was as a result of much effort by the government to make the Guyanese economy more robust and resilient and to better withstand external shocks and being less vulnerable to the vicissitudes of domestic single industry upheavals. Inflation rate was 3.3%.

The sugar industry experienced a growth of 7.1% producing 236,000 tonnes of sugar, while the rice industry made a record breaking production of 401,000 tonnes, the highest ever in Guyana’s history. Bauxite also showed an increase with export volumes moving to 1,816,548 tonnes.
Merchandise imports expanded by 24.8% to US$1.8 billion.

NEW POLITICAL DISPENSATION
Alluding to the new political dispensation, whereby, the government is a minority one, the Finance Minister exhorted that this arrangement beckons our country into a new
political epoch and heralds an opportunity for the nurturing of a new political culture.
“The prevailing dispensation will test and hopefully prove our resolve as a people and, within this House, our respective will to serve as responsible representatives of a deserving people to work together in service to the cause of national development,” the minister declared.
He, however, cautioned that while the current dispensation has important opportunities, it is also fraught with formidable challenges and the quest for lasting solutions will have to be void of partisan agendas.

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