CONTINUING along the chain of actions of fulfilling promises detailed in their ‘100 Days Plan’, the A Partnership for National Unity + Alliance for Change (APNU+AFC) coalition yesterday successfully added four additions to their list of fulfilled promises when the 2015 Fiscal budget was presented by Minister of Finance, Winston Jordan in the National Assembly.

Public Servants’ salaries
Touted heavily during the May 11 General and Regional Elections campaign by the coalition was the increase in Public Servants’ salaries which was even detailed in their ‘100 Days Plan’. Proposed in the plan at that time was: “Significant salary increases for government workers, including nurses; teachers in primary, secondary and tertiary education; security personnel; and civil servants on the traditional payroll.”
Delivering on this promise, Minster Jordan yesterday announced to the House a five per cent salary increase to all public servants, whose gross basic monthly salaries were greater than $50,000. However, persons with salaries that were equal to or lower than $50,000 were given an eight per cent increase.
Reflecting on the words of President David Granger during his address at the opening of this 11th Parliament, which were, “there will be moderate increases in salaries paid to public servants and pensions paid to seniors”, Jordan revealed that there would be an increase in the minimum basic salary of each public servant to $50,000, effective July 1, 2015.
This, he said, translates to a 26.4 percent increase for those still earning the old minimum wage of $39,540 and 17.1 percent for over 4,000 public servants earning the current minimum wage of $42,703.
Additionally, he explained that effective July 1, 2015, “all other public servants will receive a five percent salary increase plus an additional $5,000 monthly.”
The Minister reasoned that this would allow for a greater increase in the lower income brackets since a worker currently earning $50,000 will have a monthly increase of $7,500, or 15 percent; a person currently receiving a salary of $100,000 would get a 10 percent increase.
“Since the bulk of the public servants earn $100,000 and below, these are substantial increases, more than was promised to these categories of workers” he said, adding that these increases are payable to workers who were employed on or before January 1, 2015.
Underscoring the role of ‘Part-time Sweeper Cleaners’, in preserving cleanliness within classrooms and school facilities, some 1000 sweeper cleaners within the education system, with effect from September 1, 2015, will also receive $312 per hour, reflecting a 54 percent increase.
But not limited to the increase in salaries , the Minister also proposed an amendment to the Income Tax Act Chapter 81:01 for workers to no longer pay income tax on their national insurance contributions. What this simply means is that the traditional practice of deducting income tax on NIS contributions will be replaced, allowing the income tax only to be deducted after the NIS contribution would have been made.
This, he said, will result in a loss of revenue of about $1.3 billion annually, but importantly, it would result in a net increase in the disposable income of all workers. This measure will be effective from Year of Assessment 2016, Jordan stated.
Pensions
Facing heavy criticisms as the expiration date for the ‘100 Days Plan’ draws nigh, Jordan defied the odds and announced to the House last evening that 42,397 beneficiaries of old age pension will now equally benefit from a monthly pension of $17,000 – a 30 percent increase on the present amount of $13,125.
This was due to the fact that, “Significant increases in Old Age pension” was also listed in the coalition’s 100 Days plan.
Divulging further on additional benefits which senior citizens stand to profit from, the Minister stated in no uncertain terms that discriminatory practices must end. He explained that currently, only 30 percent of pensioners benefit from an electricity subsidy, since it requires either proof of ownership of property or registered tenancy of property. A similar discriminatory practice, he said, is in the provision of the subsidy for water services; only 62 percent of the registered pensioners benefit to the exclusion of over 16,000 pensioners.
Maintaining that “this must end,” Jordan told the National Assembly that all pensioners must benefit equally from whatever is being shared. But not limited to pensions, he revealed that the Government has not forgotten or neglected those who are in difficult circumstances due to disabilities. This group, he noted, will see a 10 percent increase in their public assistance, rising from $5,900 to $6,500 monthly, effective September 1, 2015. Over 9,360 men and women who are disabled or economically and medically disadvantaged will benefit from this.
Meanwhile, he explained that the Government has undertaken a forensic audit of the old age pension system, with a view to determining the accuracy of the register of pensioners.
“There is an on-going project to improve the processing, recording and monitoring of pension payments, with the objective of streamlining its operations. The Government commits to examining the pensions of retired public servants who retired in the 1970s and 1980s, and whose pensions are substantially less than those paid to recent retirees of similar pay grades or positions” Minister Jordan said.

Berbice Bridge toll
A highly anticipated move was also adopted by the David Granger-led Administration after it was disclosed by the Finance Minister last evening that the Berbice Bridge toll will be reduced from $2,200 to $1,900, which takes effect from September 1,2015. This represents a 13.6 percent decline which will benefit over 150,000 Guyanese living in Regions 5 and 6.
The reduction, which has been in the pipeline since the coalition’s assumption to Governmental office, took into consideration socio-economic factors influencing the daily lives of these citizens. However, at the same time, the toll for all other types of vehicles will be reduced by 10 percent.

VAT
As for another campaign promise that the Government, upon assuming office, would, “immediately implement a phased reduction of VAT …,” Minister Jordan noted that this assumption to office revealed a tax system that is “characterised by high tax rates”, resulting in innumerable requests for tax exemptions and concessions, which totalled $55 billion, in 2014; an unacceptable level of tax evasion that is clearly unlawful, discriminatory and stifles competition; widespread discretionary elements, which have been used to favour and reward friends, rather than encourage development; and low and/or no compliance.
As a result, this tax system which is seemingly broken, must be fixed in a comprehensive manner, the Minister told the House, adding that it is for these reasons that a delayed phased reduction in VAT will be experienced.
However, assurance was given to the public that a Tax Reform Committee will be established to undertake a detailed assessment of the tax system. But since major work has been completed in this area recently, Jordan opined that it is expected that the Committee will complete its work by the end of the year.
Notwithstanding this, the Finance Minister proposed an amendment to the Value Added Tax Act 2005 Cap. 81:05 to add the following items which will now attract zero VAT: yogurt, cereals, fresh carrots, Milo and Ovaltine, Nestum, mustard and mayonnaise, locally-produced fruit juice, locally-made chow-mein, vinegar, locally-made uncooked pasta, ketchup, chicken sausages in packets, locally-produced Chinese sauce, baking powder, liquid detergent, household cleaning agents, rolls of paper towels, liquid detergent, household cleaning agent, and computer printers for non-commercial use.
The estimated loss of revenue as a result of the elimination of VAT on these items is approximately $680 million.

By Ravin Singh