THE Private Sector Commission (PSC), though generally pleased with the 2016 budget as presented by Finance Minister Winston Jordan, noted that it is particularly concerned about Minister Jordan’s announcement that there will be restriction on the importation of vehicles older than eight years.The private sector body believes that such a restriction “has a negative connotation, and seems unnecessary at this time, and should be seriously reviewed and reconsidered.” It is the belief of the Commission that such a restriction will “place undue pressure on low and middle income persons.”

The PSC expressed disappointment that its recommendation for a comprehensive reform of corporate taxes and Pay As You Earn (PAYE) was not reflected in the budget.
“We understand that such reform may have to await the findings of the Tax Reform Committee. The increase in the tax threshold is welcomed, though we feel that this should have been higher to provide relief to low income earners,” the PSC said in a statement to the media on Wednesday.

Additionally, the private sector body expressed concerns over the implementation of measures geared at ensuring compliance. “One of the concerns of the Commission is the planned early implementation of the requirement to provide compliance certificates in order to obtain licences, but there needs to be some clarification of the impact of this. We feel that this measure, while being a good way to ensure compliance, should have been implemented at least a year after the date of (Govt’s) announcement to give persons time to get their taxes in order.”

But while the PSC made no qualms about its concerns, it said the budget generally will provide “significant stimulus to the economy as it recovers from a sluggish 2015.” The body believes that the budget will ensure growth, and is pleased about the planned expenditure on infrastructure, particularly the $2B allocated for the hinterland airstrips.

Once hinterland airstrips are improved, producers from those regions will be allowed access to markets in the city and beyond, along with improved connectivity with the hinterland.

The budgetary allocations for education, health, public security and agriculture, the PSC said, reveal that the focus of the Government is on what is needed by the country and for the good of the people.

“The PSC is pleased that the Amaila Falls Hydroelectricity Project is being studied again, and would urge the Government to see this project through, since it would have untold benefits to business and to all consumers of energy.”

The new Demerara Harbour Bridge and the East Bank to East Coast bypass were also praised by the private sector body. The PSC hopes however, that public servants will receive substantial increases in salary soon, as it is not only needed by the individuals, but the resultant spending will see the economy recovering.

Meanwhile, the PSC is pleased that there has been no reduction in the rate of the Value Added Tax (VAT), and is also pleased that packaging materials have been exempted from VAT, as well as the fact that tax refunds can be applied across the board.

“The increases in gun licence fees are also fair, and will boost Government revenue, but we are concerned about the impact on indigenous people who rely on shotguns for their livelihood,” said the PSC.

The PSC has expressed reservations about the Guyana Revenue Authority’s (GRA) capacity to ensure the smooth implementation of new measures aimed at ensuring compliance. “We do not believe that the agency is currently capable of handling the expected thousands of persons who will be seeking, in a short-time, to regularise their status as taxpayers.” The PSC said it is generally pleased with the budget, and urged the Government to ensure that all provisions of the budget are implemented, and the allocated sums are spent, since approximately 60 per cent of the economy relies on Government spending. This, the body said, is also crucial in relation to investor confidence.

“Too many investors have been adopting a ‘wait and see’ attitude, and we feel that this budget will restore that confidence and stimulate investment.” This year’s budget stands at $230B.