–with tax reforms instituted to cushion rising cost of living

REVENUE generated from valued added tax (VAT) and excise taxes has decreased by 10.2 per cent, owing to measures instituted by the government to cushion rising cost of living caused by global economic challenges stemming from the COVID-19 pandemic and, more recently, the war in Ukraine.

In its report on the first quarter of 2022, the Bank of Guyana (BoG) said that receipts from VAT and excise taxes declined by 10.2 per cent to $22.7 billion and other taxable revenues decreased by 16.2 per cent to just over $2 billion due to tax reforms.

The tax reforms referred to by the Central Bank form part of the government’s wider agenda to improve the quality of life in Guyana and address immediate economic challenges that affect Guyanese.

President Dr. Irfaan Ali, in addressing the issue of rising cost of living, had said that his government was “aggressively” tackling the issue and examining the best approaches.

Specific to tax reforms, the government, since being elected to office in 2020, has removed VAT from water, electricity, building and construction materials, basic food items and household necessities.

Additionally, stakeholders in the mining industry have benefitted from a menu of relief measures valuing roughly $1.9 billion. Among those measures were the removal of the 10 per cent tributors tax, the reduction of the final tax from 3.5 per cent to 2.5 per cent and the removal of VAT on lubricating oils. The government has also cut excise tax on fuel in light of rising fuel prices.

Outside of tax reforms, there has also been a constant increase in old-age pension and public assistance.

Additionally, the government reinstated the “Because we Care” cash grant and school uniform cash grant which stand at $30,000 per child in both public and private schools. This is in addition to billions of dollars that were disbursed through targetted cash-grant initiatives.

Guyanese could expect even more benefits as the year progresses, with plans in place to inject some $552.9 billion into the economy through various initiatives that would rapidly transform and modernise the nation.

This sum, which constitutes the government’s fiscal plan for this year, is some 44.3 per cent larger than Budget 2021 and 36.6 per cent above total expenditure last year, according to Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, during his presentation of Budget 2022 to the National Assembly, in January.

“Even as we confront, head on, the formidable challenges before us, our government continues to work in earnest to advance the aggressive agenda for transformation that we had previously outlined. At this moment of unprecedented opportunity for our country, we seek now to convert the bright prospects before us into realised national and individual well-being for all Guyanese.

“In this regard, Budget 2022 has historic significance. Building on the foundation laid by the previous two budgets, Budget 2022 launches what will be the most rapid period of transformation and modernisation ever witnessed in our country’s entire history,” Dr. Singh affirmed.

Supported by the robust institutional architecture that the government has established, Budget 2022 ensures that two complementary and critically important objectives are met: firstly, that the urgent development needs of the country are met in the shortest possible time, and that the long-term economic wellbeing of the country is protected and safeguarded at all times.

In his view, this fiscal plan, which follows the theme: “Steadfast against all challenges, resolute in building our One Guyana,” sets Guyana on the path to realising the “bright future” which the country has long awaited.