…as gov’t lifts income tax threshold to $65,000
SOME $805M will be refunded to taxpayers as government announced the lifting of the income tax threshold from $60,000 to $65,000, Finance Minister Winston Jordan has said.
Speaking during his budget presentation on Monday Jordan said: “Mr. Speaker, I propose to increase the income tax threshold to $780,000 or one-third, whichever is greater, with effect from year of income 2019. This represents a 30 per cent increase in the threshold, since the Coalition Government came to office in 2015, and would see approximately $805 million being returned to taxpayers.”
In addition, Jordan said the wages and salaries of public servants will be increased in 2019, after discussions with the respective unions. “It is our hope that a multi-year package can be concluded that progressively improves workers‘ income to a livable wage over a defined period. Also, we will recommence negotiations on improving allowances in the public service with the Guyana Public Service Union (GPSU).”
Exemptions for Public Officers/Public Officials
Additionally, Jordan announced that vehicles less than 4 years old currently pay zero per cent, up to 1,499 cc, and 10 per cent, up to 2,000 cc. However, qualifying public officials pay 10 per cent and 30 per cent, respectively for these two categories of vehicles. This is more than the rate specified in law for regular imports without exemption. “I propose, therefore, to amend the Excise Tax Regulations to remove this anomaly and ensure consistency with the applicable law,” Jordan said.
Remigrants
Regarding remigrants, he said the current remigrant system is flawed and has led to abuse on a number of occasions. In order to ensure compliance, minimise, if not eliminate, the abuse, while simplifying the process, I propose the following: A system of credits up to a limit of $5 million for vehicles imported by a remigrant. With this system, a remigrant can bring as many vehicles as he/she wishes. For example, suppose a remigrant brings in three vehicles, with an assessed value of $20 million. Then the remigrant will be credited with a tax free allowance up to a value of $5 million, and would be required to pay all applicable taxes on the balance of $15 million.
The removal of the six-month overseas ownership allows the remigrant the option of purchasing the vehicle locally, within six months of his/her arrival. This would be advantageous to the remigrant who lived in a country where driving is on the right, as opposed to Guyana, where it is on the left.
Returning students who have completed at least three years of continuous study be eligible for remigrant status.
The granting of remigrant status will continue to be determined by the Department of Citizenship and Immigration.
Support for the elderly, difficult circumstances
On the issue of the elderly, the minister proposed to increase the Old Age Pension from$19,500 to $20,500. “At the same time, I proposed to increase Public Assistance from $8,000 to $9,000. This brings it to 55 per cent and 53 per cent respectively, the increases granted to these two categories since the government came to office. Both increases, which take effect from January 1, 2019, will see persons taking home an additional $800 million, in 2019.”
“Mr. Speaker, many former public servants, Members of Parliament and other categories of workers, who retired prior to 1992, have approached me with a view of doing something about their pensions, which were decimated as a result of repeated devaluations in the 1980s and early 1990s. They have indicated that they are getting on in age and wish for the government to bring urgent relief to them. I want to assure those persons that the matter is under active consideration.”
Duty-free vehicles for differently-abled
“Mr. Speaker, with a view of ameliorating the difficulties faced by persons with disabilities, I propose to exempt from Excise Duty and VAT, vehicles for use by persons with disabilities or vehicles that will be converted for their use. Such vehicles must be able either to be driven by the disabled person, or designed for such a person. Second, Mr. Speaker, the government will examine the feasibility of granting a tax rebate on handsets with accessibility features for persons living with disabilities.
This will allow Guyanese who are visually-and hearing-impaired to afford a smartphone. In order to avoid abuse, the exemptions would be granted, after the commission representing persons with disabilities certifies that the person, the vehicle and the handset are eligible for the concessions. These two initiatives solidify government‘s commitment to equity and inclusion for all its citizens through the use of ICT,” the minister said.
