HIS Excellency President Dr. Irfaan Ali earlier this week assented to the $329.4 billion Appropriation Bill, paving the way for implementation of the budgetary measures contained therein. Despite an evidently bankrupt treasury, the emergency budget for 2020 contained sufficient fiscal and monetary measures designed to put the economy on a path of recovery amidst the economic impact of the COVID-19 pandemic. More importantly, it is also a budget that will stimulate both investors’ and consumers’ confidence in the economy, so that companies will be encouraged to invest more, and, in turn, create more jobs so that persons who were out of jobs due to COVID-19 can find themselves back to work and earning salaries.

Interestingly, the budget was described as a private-sector oriented budget by the former Minister of Finance and that it is not a peoples’ budget. However, one ought to appreciate and understand that it is the private sector that creates jobs and generates wealth where employees, who are also consumers, earn incomes, pay their taxes, and more importantly, the private sector is the largest taxpayer and therefore the largest source of income for the government. By removing a plethora of taxes, this will encourage more investments which will allow companies to make more profits; and making more profits means that more taxes will be collected essentially.

To these ends, the budget removed the imposition of VAT on a series of items including electricity, water, building and construction materials, mining equipment, agricultural equipment, reduction in licence fees by 50 per cent, removal of corporate tax on private education and health care, removal of VAT on all-terrain vehicles for mining, forestry, agriculture and manufacturing, and the list goes on. In addition, measures such as the mortgage interest relief being increased from $20 million to $30 million will also benefit all home owners and potential home owners with home loans of up to $30 million. The same applies to the low-income loans bracket, which has been increased from $8 million to $10 million. These measures, automatically, will benefit Guyanese from all walks of life, low income, middle income and the wealthy.

These policies are designed to encourage investment from the private sector, boost confidence, and create thousands of jobs within the economy by empowering people all across the country to have their own businesses, and an opportunity to build, design and own their own homes from the lowest income to the highest income – which the people were denied of such empowerment over the last five years, undeniably and irrefutably so. A private sector-friendly budget also creates the enabling environment for entrepreneurship to thrive, thus empowering people to invest in their own businesses, which also creates more employment. In fact, the budget allocated over some $300 million for small businesses to benefit from grants and loans.

There were also some criticisms on the $95 million allocation for vehicles for government officials in the budget. However, the critics have ignored the allocation of over $300 million to support small businesses through grants and loans; they have ignored the risk allowance for the frontline health workers of $150 million; they have ignored the $4.5 billion to support households who have been affected by COVID-19, where some 45% of households have lost their incomes and are on the breadline. They have ignored the fact that the health and education sectors have been affected and so by removing the 25 per cent corporate tax, this will allow for persons to have greater access to education and healthcare, as the public system is not in competition with the private service providers in these areas per se; rather, they are complementary, in this circumstance especially.

There are many other measures in the budget to support not only the health workers and public servants, but also the vulnerable, and thousands of households affected as well as the productive sectors that have been neglected and destroyed over the last five years. The budget contained fiscal measures to put back the productive sectors to work, which in turn will create employment and help to reduce the level of unemployment in the economy, and, in turn, set the stage for a sea of transformational development projects over the next five years.