2002 Budget Measures


No new taxes, fees or fines

This is the fourth consecutive year of no new taxes, fees or fines.  However, the upward movement in the customs rate of the US dollar is an effective tax increase as does inflation which erodes the real value of the personal allowance. 

There is no indication whether the policy of no new taxes is dictated by the absence of the long promised tax reform or a failure to recognise fiscal policy as an important tool of management.

Reduction in Entertainment Tax In a 1994 paper on “Tax Reform, A Vehicle for Economic Recovery,” Ram & McRae had pleaded for this reduction. Eight years later, several cinemas have closed around the country but one hopes that it is not too late to save the surviving cinemas.
The Government has again announced Comprehensive Tax Reform to be implemented in 2003. This has been promised since 1993 and the sincerity and commitment must be in some doubt. In any case comprehensive tax reforms require widespread consultation.
Approximately G$2Bn has been projected for poverty reduction programmes. While the Minister identified the disbursing agencies he gave few details of how these would operate, and the specific targets of the programmes.
Tax Concession in Support of Tourism. Remission of duties and consumption tax to 50% and the exemption of tourism resort facilities from 10% hotel accommodation tax. This is a positive development which should help in an expansion of the sector. The establishment of a market-oriented well-funded Tourism Authority could offer further benefits for the sector. Visitor arrivals to Guyana have declined, but the table attached to the Speech has no data for the years 1999-2001. This is obviously necessary information for marketing and planning purposes.